- 9 -
Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). Since
section 7491(a) does not alter the taxpayer's burden of proof
where the taxpayer has not complied with all applicable
substantiation requirements, including those of section 274(d),
sec. 7491(a) does not apply here. Higbee v. Commissioner, 116
T.C. 438, 442 (2001). Taxpayers have the burden of proving that
they meet each of the conditions of section 7491(a), because the
conditions are necessary prerequisites to establishing that the
burden of proof is on the Secretary. H. Conf. Rept. 105-599, at
239 (1998), 1998-3 C.B. 747, 993.
Section 162(a) allows a taxpayer to deduct all ordinary and
necessary business expenses paid or incurred during the taxable
year in carrying on any trade or business. To be "necessary" an
expense must be "appropriate and helpful" to the taxpayer's
business. Welch v. Helvering, 290 U.S. 111, 113 (1933). To be
"ordinary" the transaction which gives rise to the expense must
be of a common or frequent occurrence in the type of business
involved. Deputy v. du Pont, 308 U.S. 488, 495 (1940). No
deduction is allowed for personal, living, or family expenses.
Sec. 262(a).
Generally, if a claimed business expense is deductible, but
the taxpayer is unable to substantiate it, the Court is permitted
to make as close an approximation as it can, bearing heavily
against the taxpayer whose inexactitude is of his or her own
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011