- 12 - claimed on Schedule C because the expenses are directly related to petitioner’s professional reputation, and thus SLS. Respondent argues that the origin of petitioner’s legal fees did not arise from her Schedule C trade or business, and that under United States v. Gilmore, supra, the consequences to petitioner’s Schedule C business are irrelevant to the analysis. Based upon the record, the origin of petitioner’s legal fees stems from her status as an employee of UCSF, and not from her Schedule C trade or business. The event that prompted petitioner to hire attorneys in 1994 was the State audit of CPRT and the impending release of the audit report. While the record is replete with testimony from petitioner regarding the reasons she retained legal counsel, it is also replete with evidence that the event that prompted the legal services was the State audit. The billing detail from petitioner’s attorneys indicates that the majority of their services concerned the impending release of the State’s audit report and centered around the State audit of CPRT. The billing detail further indicates that the legal services performed were directly related to her employment with UCSF as director of CPRT. Indeed, the entire record indicates that petitioner hired attorneys in response to the State audit of CPRT. We do not question whether petitioner was engaged in a Schedule C trade or business. Nor do we doubt that petitionerPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011