Joseph B. Campbell - Page 26

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          charitable deduction under sections 170 and 7871.  In his brief,            
          petitioner claims that, for 1993, he has not been reimbursed by             
          the tribe for $7,072 in direct expenses and $4,950 in meeting               
          payments (66 meetings charged at $75 each)16 and, for 1994, he              
          has not been reimbursed for $9,089 in direct expenses and $7,725            
          in meeting payments (103 meetings charged at $75 each).                     
               Respondent argues that in order to claim a deduction under             
          section 162(a), petitioner must have incurred and paid the                  
          expenses he seeks to deduct, and, therefore, petitioner cannot              
          deduct the meeting payments.  Respondent further argues that                
          petitioner has not presented credible evidence to substantiate              
          the deductions for direct expenses.                                         
               Section 162(a) Deduction                                               
               Section 162(a) permits a taxpayer to deduct the ordinary and           
          necessary expenses paid or incurred during the taxable year in              
          carrying on a trade or business.  See Commissioner v. Lincoln               
          Sav. & Loan Association, 403 U.S. 345, 352 (1971).  In order for            
          a taxpayer “to be engaged in a trade or business, the taxpayer              
          must be involved in the activity with continuity and regularity             
          and * * * the taxpayer’s primary purpose for engaging in the                
          activity must be for income or profit.”  Groetzinger v.                     
          Commissioner, 480 U.S. 23, 35 (1987).  An expense is ordinary if            

               16Petitioner actually claimed in his brief that he was owed            
          $5,050 in meeting payments.                                                 

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