Frank and Barbara Biehl - Page 14

                                       - 14 -                                         
          subject, as compared with business owners, partners in firms, and           
          independent contractors.                                                    
               The general proposition is that a deduction is allowed under           
          section 62(a) only if it is allowable under some other provision            
          of the Internal Revenue Code (Code).  Section 62(a) merely                  
          enumerates the deductions allowed an individual in computing                
          adjusted gross income; it does not create any new or additional             
          deductions that are not already provided for by some other                  
          section of the Code.  See sec. 1.62-1T(b), Temporary Income Tax             
          Regs., 53 Fed. Reg. 9873 (Mar. 28, 1988).  In the case of                   
          paragraphs (1) and (2)(A) of section 62(a), the allowable                   
          deduction already provided under another section of the Code is             
          the general provision for the deductibility of trade or business            
          expenses found in section 162(a).                                           
               The specific restriction to which employees are subject                
          under section 62(a)(2)(A) is that their deductions allowed in               
          computing adjusted gross income are restricted to those expenses            
          paid or incurred “in connection with the performance by him of              
          services as an employee, under a reimbursement or other expense             
          allowance arrangement with his employer.”8  This language sets              

               8Before 1986, sec. 62(2)(B) allowed employees to deduct from           
          gross income in arriving at adjusted gross income travel expenses           
          while away from home, transportation expenses, and expenses                 
          incurred by “outside salesmen” engaged in soliciting business for           
          the employer’s place of business.  Sec. 62(2)(B), (C), and (D),             
          I.R.C. 1954.  As a result of the enactment of the Tax Reform Act            

Page:  Previous  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  Next

Last modified: May 25, 2011