- 7 - that home office are not deductible under section 280A(c)(1). Respondent is sustained on this issue. Petitioners next contend that such an interpretation of section 280A(c)(1) is unconstitutional. Petitioner argues that it is irrational not to allow the matching of costs against revenues as it not only deviates from generally accepted accounting principles but it also requires taxpayers to pay taxes on gross income with no benefit of the deduction for the expenses incurred to produce that income. Such a result, petitioners contend, violates due process principles. To the extent that petitioners' claim is based on the Fourteenth Amendment of the U.S. Constitution, this Court has held that the Fourteenth Amendment does not apply to Federal tax statutes. Labay v. Commissioner, 55 T.C. 6, 14 (1970), affd. per curiam 450 F.2d 280 (1971). Thus, the Equal Protection and Due Process Clauses of the Fourteenth Amendment do not operate as a limitation on the taxing power of the Federal government. Hamilton v. Commissioner, 68 T.C. 603, 606 (1977). In general, a Federal tax law is not violative of the Due Process Clause of the Fifth Amendment of the U.S. Constitution unless the statute classifies taxpayers in a manner that is arbitrary and capricious. Hamilton v. Commissioner, supra at 606; Shaffer v. Commissioner, T.C. Memo. 1994-618. Here, petitioners have not shown that section 280A(c)(1) classifiesPage: Previous 1 2 3 4 5 6 7 8 9 10 Next
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