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Respondent also determined that petitioner was liable for the
accuracy-related penalty under section 6662(a) for negligence or
disregard of rules or regulations in the amount of $933.40.
Petitioner conceded the adjustments to his dependency
exemption deductions and the Schedule C gross receipts.
Respondent conceded the adjustments to petitioner's Schedule C
rent or lease expenses and utilities expenses. As detailed
below, respondent made partial concessions with respect to the
Schedule C car and truck expenses and depreciation/section 179
expense deduction.
The first issue is whether petitioner is entitled to a
deduction for car and truck expenses in excess of the amount
allowed by respondent. Petitioner claimed Schedule C car and
truck expenses of $2,802 for mileage during 1997; i.e.,
approximately 8,900 miles at 31.5 cents per mile. In the notice
of deficiency, respondent disallowed $2,500 of the claimed
amount; however, prior to trial, respondent conceded that
petitioner was entitled to deduct an additional $870 for car and
truck expenses. Thus, the remaining amount of car and truck
expenses in dispute is $1,630.
Section 162(a) allows a deduction for the ordinary and
necessary expenses paid or incurred during the taxable year in
carrying on a trade or business. To qualify for the deduction,
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