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activity. In short, as petitioner recognized, the so-called
gifts were a part of the compensation he received for being a
minister. As such, the transfers are not excludable from income
under section 102(a). See Goodwin v. United States, 67 F.3d 149
(8th Cir. 1995); Webber v. Commissioner, 219 F.2d 834 (10th Cir.
1955), affg. 21 T.C. 742 (1954); Banks v. Commissioner, T.C.
Memo. 1991-641.
B. Schedule C Expenses
Section 162(a) allows deductions for ordinary and necessary
expenses paid or incurred in carrying on any trade or business
including travel expenses while away from home. The taxpayer has
the burden of establishing that such expenses were paid or
incurred. See Welch v. Helvering, 290 U.S. 111 (1933). In
addition, certain other provisions mandate that a taxpayer
maintain specific records concerning certain types of expenses.
See sec. 274. With these principles in mind we turn to the
expenses claimed and in dispute here.
1. Automobile.--Petitioners claimed a deduction of $9,294
for automobile expenses. Respondent disallowed $7,966 of that
amount. The deduction claimed was based on the number of miles
allegedly driven in connection with petitioner’s ministry.
Section 274(d)(4) provides that no deduction shall be allowed
with respect to “listed property” unless certain substantiation
rules are met. Listed property includes any passenger
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