- 6 - Troy, New York. Troy treated petitioner as a common law employee on the Forms W-2 it issued to petitioner. Petitioner does not contest that classification. While, under the nonexecuted employment agreement, petitioner was to be reimbursed for his expenses, it is undisputed that petitioner incurred expenses for which he was not reimbursed. On his income tax returns, petitioner claimed deductions for the expenses associated with his activities with Empire on Schedule C, Profit or Loss From Business. The returns were prepared by petitioner’s accountant who had full knowledge of all of the facts. Respondent determined that these expenses should be properly reported on Schedule A, Itemized Deductions, as unreimbursed employee business expenses. Discussion There is no dispute that petitioner incurred the expenses for the deductions he claimed. Rather, the dispute focuses on whether petitioner should be considered a common law employee or a statutory employee. If petitioner is characterized as a common law employee, the deductions for his expenses are not deductible in determining adjusted gross income, see sec. 62(a)(1), are classified as “miscellaneous itemized deductions”, sec. 67(b), and are limited “to the extent that * * * [they exceed] 2 percent of adjusted gross income”, sec. 67(a). In addition, miscellaneous itemized deductions are not deductible forPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011