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Section 162 allows a deduction for ordinary and necessary
expenses that are paid or incurred during the taxable year in
carrying on a trade of business. Sec. 162(a); Deputy v. Dupont,
308 U.S. 488, 495 (1940). A trade or business includes the trade
or business of being an employee. O’Malley v. Commissioner, 91
T.C. 352, 363-364 (1988).
As noted earlier, petitioner was engaged during the years at
issue both as an employee and as a self-employed person. Some of
the deductions claimed on her returns related to employee
business expenses (Schedule A), and others related to her self-
employment activity (Schedule C). Respondent reallocated some of
the expenses between petitioner’s two activities, a determination
that petitioner does not challenge. Other expenses were
disallowed for lack of substantiation, which petitioner does
challenge. With respect to those expenses, the Court notes that
petitioner did not maintain books and records to chronicle her
income and expenses, nor did she maintain logs on the uses of her
vehicles in her activities. She presented at trial receipts and
copies of checks purportedly to substantiate expenses she
incurred. However, those receipts do not establish to the
Court’s satisfaction a substantiation of expenses incurred in any
amounts greater than the amounts allowed by respondent in the
notices of deficiency, with one exception discussed below. Some
of the evidence presented appeared to be for personal expenses,
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