- 13 -
with his trade or business, petitioner presented no documentation
or any other evidence to substantiate the payment in question.
Respondent, therefore, is sustained on this issue.
Finally, the last issue for decision is whether petitioner
is entitled to deduct certain miscellaneous Schedule C expenses
in excess of amounts allowed by respondent. In the notice of
deficiency, respondent disallowed $3,500 of Schedule C “other
expenses” petitioner deducted in the year 2000. On his income
tax return, petitioner claimed $1,500 for business meeting
expenses and $2,000 for telephone expenses.9
Section 162 allows a taxpayer to deduct ordinary and
necessary expenses that are paid or incurred during the taxable
year in carrying on a trade or business. Sec. 162(a); Deputy v.
du Pont, 308 U.S. 488, 495 (1940). Furthermore, expenses paid or
incurred by a taxpayer to attend a business meeting may
constitute an ordinary and necessary business expense depending
on the facts and circumstances of each case. Sec. 1.162-2(d),
Income Tax Regs. These expenses, however, are subject to certain
substantiation requirements. Sec. 1.162-2(f), Income Tax Regs.
In order to substantiate an expense, the taxpayer must keep
such records as will be sufficient to enable the Commissioner to
correctly determine income tax liability. Furthermore, the
9 As noted earlier, see supra note 2, respondent conceded
$579.44, leaving $2,920.56.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011