Vincent Ekeh - Page 6




                                        - 5 -                                         
               The second issue for decision is whether petitioner is                 
          entitled to miscellaneous itemized deductions for employee                  
          business expenses in each of the years in issue.  Petitioner                
          claimed miscellaneous itemized deductions for employee business             
          expenses in the amounts of $14,875.54 for 1995 and $5,974.66 for            
          1996.  Respondent disallowed the miscellaneous itemized                     
          deductions in full because petitioner had not established both              
          that the expenses shown were paid or incurred during the taxable            
          year and that they were ordinary and necessary to his business.             
               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.  A taxpayer may be in the trade            
          or business of being an employee.  See Primuth v. Commissioner,             
          54 T.C. 374, 377-378 (1970).  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”.  Commissioner v.              
          Groetzinger, 480 U.S. 23, 35 (1987).  An ordinary expense is one            
          that relates to a transaction “of common or frequent occurrence             
          in the type of business involved”, Deputy v. du Pont, 308 U.S.              
          488, 495 (1940), and a necessary expense is one that is                     
          “appropriate and helpful” for “the development of the                       
          petitioner’s business,” Welch v. Helvering, 290 U.S. 111, 113               
          (1933).  Finally, job search expenses are deductible under                  
          section 162(a) to the extent they are incurred in searching for             






Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011