- -12 from Gillette Tire, nor to the installation of tires on petitioner's trucks. Also, Agent Siebert, during his audit of petitioner's income tax liability, asked to see all of petitioner's documents relating to the rental of Nikki's concrete trucks, including documents which showed how the rental rate was set and how many trucks were being rented. Petitioner had very few records with reference to the rental of trucks and no records showing the number of trucks that were used by petitioner on a weekly, monthly, or yearly basis. Respondent in her notice of deficiency determined that petitioner was not entitled to deduct $258,425 of its claimed deduction for truck maintenance expenses. This amount was the total amount of checks numbered 4318 and 4369 to Gillette Tire which petitioner claims were for tires purchased for its trucks. OPINION Section 162(a) generally allows a taxpayer a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. These expenses must be directly connected with or pertaining to the taxpayer's trade or business. Sec. 1.162-1(a), Income Tax Regs. As a general rule, where an expense is the obligation of another, a taxpayer cannot properly claim a deduction for the expense as an ordinary and necessary expense of his business. Deputy v. du Pont, 308 U.S. 488 (1940); Betson v. Commissioner,Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011