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Petitioners also earned $17 in taxable interest from the Eli
Lilly Credit Union which they failed to report on their return.
Ms. Wang seeks relief from joint and several liability for
the deficiency pursuant to section 6015.
Discussion
1. Unreimbursed Employee Business Expenses
Under section 7491(a)(1), the burden of proof may shift to
the Commissioner. Because the unreimbursed employee business
expense issue is a question of law, section 7491 is inapplicable,
and the Court decides the issue without regard to the burden of
proof.
Pursuant to section 162(a), a taxpayer may deduct
unreimbursed expenses which he actually paid and which were
ordinary and necessary expenses of his trade or business. Lucas
v. Commissioner, 79 T.C. 1, 6 (1982). Because the business of a
corporation is not considered the business of its shareholders or
officers, Burnet v. Clark, 287 U.S. 410, 415 (1932), unreimbursed
expenditures undertaken for the benefit of the corporation by one
of its officers generally are not deductible by the officer,
Deputy v. DuPont, 308 U.S. 488, 494 (1940).
Mr. Applegate testified that he incurred expenses on behalf
of DriAll in his capacity as a corporate officer. He claims he
sought reimbursement from DriAll for his expenses but DriAll did
not have the funds to reimburse him. What happened, in practice,
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