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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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