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Ent., Publicity 824.00
Networking 307.00
Mileage 290.00
Total expenses $5,083.00
Petitioners did not produce documentation at trial to
substantiate any of the above expense items, except for the $450
agent fee. However, petitioners claim that the above expenses
were included in the $34,430 of business expenses deducted on
Schedule A that respondent concedes were substantiated by
petitioners. Petitioners request that the $5,083 of business
expenses be removed as deductions from Schedule A and be reported
as Schedule C expense deductions.
Section 162(a) allows a taxpayer to deduct ordinary and
necessary business expenses paid or incurred during the taxable
year in carrying on any trade or business. 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). To be “necessary” an
expense must be “appropriate and helpful” to the taxpayer’s
business. Welch v. Helvering, 290 U.S. 111, 113 (1933).
Additionally, the expenditure must be “directly connected with or
pertaining to the taxpayer’s trade or business”. Sec. 1.162-
1(a), Income Tax Regs.
Generally, if a claimed business expense is deductible, but
the taxpayer is unable to fully substantiate it, the Court is
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Last modified: May 25, 2011