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Schedule C as a business expense in arriving at adjusted gross
income. See also McKay v. Commissioner, supra at 492.
Section 62(a)(2)(A), in contrast to section 62(a)(1), allows
taxpayers to deduct from gross income in computing adjusted gross
income deductible expenses that are “incurred by the taxpayer, in
connection with the performance by him of services as an
employee”. The proper inquiry in deciding whether an expense has
a “business connection” is what the expenditure was “in
connection with”, and not simply whether the expenditure arose
from, or had its origins in, the taxpayer’s trade or business.
At current count, the phrase “in connection with” appears
288 times in the Code. There is a body of caselaw following and
relying on Snow v. Commissioner, 416 U.S. 500, 503-504 (1974),
that has interpreted the phrase broadly. In Snow, the Supreme
Court considered “in connection with” in the context of section
174(a)(1), which allows a taxpayer a deduction for “‘experimental
expenditures which are paid * * * in connection with his trade or
business’”. Id. at 501. The Court compared section 174(a)(1) to
section 162(a), which allows a deduction for expenses paid “in
carrying on a trade or business”. The Court found section 162(a)
to be “more narrowly written” than the “in connection” language
of section 174(a)(1). Id. at 503. The Court held that section
174(a)(1) allowed a deduction even though the taxpayer had not
been engaged in a trade or business in the year in which the
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