- 8 -
also Hillsboro Natl. Bank v. Commissioner, 460 U.S. 370, 380,
n.10 (1983) (citing Koch v. Alexander, supra). Petitioner has
not shown that respondent abused his discretion here.
Deductions for Legal Expenses
In the notice of deficiency respondent determined that
petitioner has not shown that the legal expense deductions on
Schedules C of his 1997 and 1998 tax returns were deductible as
ordinary and necessary business expenses.
Petitioner contends that the law suit against the
association, for which funds were expended, was intended to
retrieve "taxable income" and tax losses and credits and
therefore the expenses are deductible under section 212 or 216.
He argues in his brief:
Petitioner's litigation with the PVHA was motivated by
the desire to force the PVHA to provide a complete
disclosure of its finances and accounting records so
that Petitioner could not only accurately determine his
losses and thus his income tax liabilities, but to
obtain his share of over $500,000 in misappropriated
funds, tax credits, and non-exempt income.
Petitioner further admonishes the Court to focus on "what that
effort would have ultimately produced if Petitioner had been
successful."
Deduction Under Section 212
The Court must decide whether the legal fees petitioner
incurred are deductible under section 212, which provides:
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011