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effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
Respondent determined deficiencies in petitioner’s Federal
income taxes of $6,752 and $675 for the taxable years 1997 and
1998. The issue for decision is whether petitioner is entitled
to disallowed deductions claimed as business supplies expense.1
Some of the facts have been stipulated and are so found.
The stipulations of fact and the attached exhibits are
incorporated herein by this reference. Petitioner resided in
Matthews, North Carolina, on the date the petition was filed in
this case.
During the years in issue, petitioner worked as an
independent contractor for Imperial Construction, Inc., and was
paid commissions for the jobs he completed. He filed a Schedule
C, Profit or Loss From Business, in each year in issue, claiming
deductions for supplies expense of $26,250 in 1997 and $3,588 in
1998. In the statutory notice of deficiency, respondent
disallowed $19,441 and $2,655 of these deductions, respectively.
A taxpayer may deduct the ordinary and necessary expenses
paid or incurred during the taxable year in carrying on a trade
or business. Sec. 162(a). A taxpayer, however, generally must
keep records sufficient to establish the amounts of the items
1The remaining adjustments in the statutory notice of
deficiency are computational and will be resolved by the Court’s
holding on the issue in this case.
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Last modified: May 25, 2011