- 10 - raised by respondent, the burden does not shift to respondent under Rule 142.3 II. Corporate Card Charges A. Ordinary and Necessary Business Expenses Petitioners contend that the charges at issue qualified as business expenses of RAF. Section 162 generally allows a deduction for ordinary and necessary business expenses. In general, an expense is ordinary under section 162 if it is considered “normal, usual, or customary” in the context of the particular business out of which it arose. Deputy v. du Pont, 308 U.S. 488, 495 (1940). An expense is necessary if it is appropriate and helpful to the taxpayer’s trade or business. Commissioner v. Tellier, 383 U.S. 687 (1966). If an expenditure is primarily motivated by personal considerations, no deduction for it will be allowed. See Henry v. Commissioner, 36 T.C. 879, 884 (1961). Deductions are a matter of legislative grace, and the taxpayer bears the burden of proving that it is entitled to any deduction claimed. Rule 142(a); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440 (1934). This includes the burden of 3Before and during trial, petitioners made arguments with respect to shifting the burden of proof to respondent under sec. 7491. At the conclusion of trial, petitioners orally moved that the burden be shifted to respondent. The Court requested that the parties address this issue in their briefs. For the reasons discussed supra, petitioners’ oral motion will be denied.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011