- 7 -
source of income was her children and other individuals for whom
advice was provided by OMNIX.
Respondent asserts that OMNIX' claimed expenses are not
"ordinary and necessary" expenses incurred in the carrying on of
business. Respondent also asserts that the disputed items
claimed have not been substantiated.
Section 162 generally allows a deduction for ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business. An ordinary and necessary
expense is one which is appropriate and helpful to the taxpayer's
business and which results from an activity which is common and
accepted practice. See Boser v. Commissioner, 77 T.C. 1124, 1132
(1981), affd. without published opinion (9th Cir. 1983); Shores
v. Commissioner, T.C. Memo. 1998-193; Irwin v. Commissioner, T.C.
Memo. 1996-490, affd. without published opinion 131 F.3d 146 (9th
Cir. 1997). Whether an expense is "ordinary and necessary" is
generally a question of fact. See Commissioner v. Heininger, 320
U.S. 467, 475 (1943); Walliser v. Commissioner, 72 T.C. 433, 437
(1979); Shores v. Commissioner, supra.
OMNIX claimed deductions for business expenses in the
amounts of $40,913 and $28,393 in 1994 and 1995, respectively.
Petitioner has provided no credible testimony regarding the
expenses at issue. Testimony given on the matter was both vague
and inconsistent. We cannot conclude that OMNIX conducted any
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011