- 4 - Discussion Deductions are a matter of legislative grace, and the burden of showing the right to deductions is on the taxpayer. See Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992). A. Schedule C Deductions The Schedule C deductions that remain in issue fall into four broad categories: (1) Office expenses; (2) meals and entertainment; (3) repairs and maintenance; and (4) parking/tolls. 1. Office Expenses Total office expense deductions at issue are $73,294.50 for 1993, and $23,815.97 for 1994, and fall into two broad categories: (a) Office expense deductions allegedly taken to offset improperly reported income items; and (b) other office expenses. a. Office Expense Deductions Allegedly Taken To Offset Improperly Reported Income Items The first issue is whether petitioner can deduct $72,516 and $15,956.97 in office expense deductions allegedly taken to offset improperly reported income items in 1993 and 1994, respectively. Petitioner argues that he included nontaxable items in gross receipts and then deducted the same amount on Schedule C as an office expense because the items included in income were nontaxable. From this, we conclude that petitioner acknowledgesPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011