- 6 -
1993 1994
Gas & oil $3,588.08 $3,458.83
Lodging 7,547.28 7,478.77
Depreciation 500.00 3,000.00
Insurance 672.12 842.00
Interest - 0 - 1,660.89
Contract help 2,967.84 3,294.00
Postage 2,341.70 1,435.76
Rent & lease - 0 - 126.00
Supplies 1,431.11 2,175.31
Taxes & lic. 130.00 195.00
Airfare 335.12 - 0 -
Meals 6,818.06 2,714.36
Telephone 1,604.80 2,349.16
Cleaning svc. 865.63 874.18
Car repair - 0 - 1,325.61
In the notice of deficiency, respondent disallowed all of
the deductions claimed on the Schedules C. Respondent further
determined that petitioner performed services for the DOI as an
employee of the State rather than as an independent contractor.
Discussion
Generally, section 162(a) allows a taxpayer to deduct “all
the ordinary and necessary expenses paid or incurred during the
taxable year in carrying on any trade or business”, including the
business of being an employee. See Commissioner v. Flowers, 326
U.S. 465 (1946); Primuth v. Commissioner, 54 T.C. 374, 377
(1970). In general, traveling expenses, including expenses for
meals and lodging, qualify for deduction if the expenses are:
(1) Reasonable and necessary; (2) incurred while the taxpayer is
“away from home”; and (3) directly connected to the conduct of
the taxpayer’s trade or business. Sec. 162(a)(2); Commissioner
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