Samuel C. Stone and Susan C. Stone - Page 11

                                       - 11 -                                         
          are not considered necessary.  Deputy v. du Pont, supra; Noland             
          v. Commissioner, 269 F.2d 108, 109 (4th Cir. 1959); Westerman v.            
          Commissioner, 55 T.C. 478, 482 (1970); Stolk v. Commissioner, 40            
          T.C. 345, 357 (1963), affd. 326 F.2d 760 (2d Cir. 1964); Jergens            
          v. Commissioner, 17 T.C. 806, 811 (1951); Harding v.                        
          Commissioner, T.C. Memo. 1970-179.  Merely because an employer is           
          financially unable to reimburse an employee for expenses paid by            
          the employee on the employer's behalf does not necessarily                  
          entitle the employee to a deduction.  Thomas v. Commissioner,               
          T.C. Memo. 1988-505.                                                        
               On the other hand, if, as a condition of employment, an                
          employee is required to incur expenses on behalf of his or her              
          employer, the employee is entitled to a deduction for those                 
          expenses that are ordinary and necessary to his or her business             
          as an employee to the extent such expenses are not subject to               
          reimbursement.  Schmidlapp v. Commissioner, 96 F.2d 680 (2d Cir.            
          1938); Eder v. Commissioner, T.C. Memo. 1981-408.                           
               Respondent argues that the expenses do not constitute                  
          ordinary and necessary employee business expenses within the                
          meaning of section 162(a) because petitioner, as a corporate                
          officer and employee of Stone Jessup, incurred the expenses                 
          voluntarily and not because Stone Jessup required him to do so as           
          a condition of his employment.  We do not agree.                            
               As the only director and officer of Stone Jessup, it would             
          have been petitioner who would have established the conditions of           




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011