- 3 - Claimed Adjustment Allowed Melaleuca Business Office expenses $3,232 ($3,232) $0 Supplies 885 585 1,470 Meals/Entertainment 1,638 (1,151) 487 Travel expenses 2,835 (1,681) 1,154 Other expenses 7,424 (2,794) 4,630 Musician Business Advertising 257 4 261 Car/Truck expenses 2,132 (1,548) 584 Itemized Deductions Miscellaneous 8,915 (197)1 8,718 The notice of deficiency stated that the various business expenses were disallowed because it had not been established that each amount “was for an ordinary and necessary business expense, or was expended for the purpose designated.” Section 162(a) allows a deduction for the ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. Personal, living, and family expenses, however, generally are not allowed as deductions. See sec. 262. A taxpayer is required to maintain records sufficient to establish the amount of his income and deductions. See sec. 6001; sec. 1.6001-1(a), (e), Income Tax Regs. In the event that a taxpayer establishes that a deductible expense has been paid but is unable to substantiate the precise amount, we generally may estimate the amount of the deductible expense, bearing 1This adjustment was computational and is not disputed by petitioners.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011