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records pertaining to the Schedule C activities remained with the
former husband. Petitioner attempted unsuccessfully to obtain
those records.
The revenue agent who conducted the audit determined that
petitioner was entitled to relief as an innocent spouse under
section 6015(f). That determination was overruled on review.
The reviewer decided that she had knowledge of the understatement
and had not established any hardship. The Appeals Officer
adopted that recommendation.
Discussion
Schedule C Deductions
Section 162(a) allows a deduction for all ordinary and
necessary expenses incurred in carrying on a trade or business.
Section 274(d), however, provides that no deduction is allowed
for certain expenses unless the taxpayer “substantiates by
adequate records or by sufficient evidence corroborating the
taxpayer’s own statement”, inter alia, the time and place of the
travel and the business purpose of an expense. The deductions
that fall within section 274(d) include travel expenses, sec.
274(d)(1), and deductions “with respect to any listed property
(as defined in section 280F(d)(4)”, sec. 274(d)(4). Included
within the ambit of “listed property” are passenger automobiles
and “computer or peripheral equipment”. Sec. 280F(d)(4)(A).
There is an exception for computers and peripheral equipment used
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Last modified: May 25, 2011