Philip M. Cavanagh - Page 6

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               Section 162(a) authorizes a deduction for all ordinary and             
          necessary expenses paid or incurred during a taxable year in                
          carrying on a trade or business.  A “trade or business” includes            
          the trade or business of being an employee.  O’Malley v.                    
          Commissioner, 91 T.C. 352, 363-364 (1988); Primuth v.                       
          Commissioner, 54 T.C. 374, 377-378 (1970).  The costs of going              
          between one business location and another business location                 
          generally are deductible under section 162(a).  Rev. Rul. 55-109,           
          1955-1 C.B. 261.                                                            
               The parties disagree as to whether petitioner’s                        
          transportation expenses should be reported on Schedule A or                 
          Schedule C.  Respondent contends that petitioner, as an employee,           
          must claim the expenses at issue on his Schedule A as                       
          miscellaneous itemized deductions and that they are limited to              
          the amount that exceeds the 2-percent floor imposed by section              
               Section 62(a)(1) allows taxpayers to deduct from gross                 
          income trade or business expenses “which are attributable to a              
          trade or business carried on by the taxpayer, if such trade or              
          business does not consist of the performance of services by the             
          taxpayer as an employee.”  (Emphasis added.)  Expenses excluded             
          under the section 62(a)(1) employee expense limitation are                  
          treated as itemized deductions under section 63(d).  Under                  

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