- 11 - prove that he actually incurred the claimed expenses; respondent asserts that petitioner’s testimony standing alone is insufficient proof for this purpose. Respondent asserts thirdly that petitioner may not use the subject revenue procedures to ascertain the amounts of his deductions because, respondent asserts, those revenue procedures do not apply when only incidental expenses are incurred. We agree with petitioner that he is entitled to the claimed deductions but disagree with him as to the amounts of those deductions. We hold that petitioner’s deductions are limited to the incidental expense portions of the applicable M&IE rates. We begin our analysis with the relevant statutory provisions. An individual may deduct all ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. See sec. 162(a). Services performed by an employee constitute a trade or business for this purpose, see O'Malley v. Commissioner, 91 T.C. 352, 363-364 (1988), and ordinary and necessary expenses generally include amounts which an employee pays while traveling away from home in connection with his or her employment, see sec. 162(a)(2). Section 162 does not, however, allow a taxpayer to deduct travel expenses attributable to personal, living, or family expenses. See sec. 262. Nor does section 162 allow a taxpayer to deduct travel expenses absent either compliance with the substantiation requirements of sectionPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011