- 7 -
Second, we note that irrespective whether the Renaissance
activity was a trade or business, the disallowed travel and car
expenses were not substantiated as required by sections 274(d)
and 280F(d)(4) applicable to so-called listed property including
passenger automobiles. See sec. 1.274-5T, Temporary Income Tax
Regs., 50 Fed. Reg. 46037 (Nov. 6, 1985). Petitioner’s travel
and car expenses were related to the use of his personal
automobile. Petitioner has no records pertaining to the use of
his automobile for the Renaissance activity.
Third, with respect to the disallowed expenses relating to
the insurance business activity, petitioner lacked substantiation
9(...continued)
Taxpayers participating in home-based business
schemes invariably do not have a bona fide home-based
business and are not using any portion of their
residences exclusively and regularly for a work-related
use. These schemes will not convert otherwise
nondeductible personal, living or family expenses into
legitimate deductions. Moreover, detailed
recordkeeping cannot create a permissible deduction
unless the expenses at issue are legitimate business
expenses. Although deductions must be substantiated in
order to be allowable, a taxpayer also must establish
entitlement to the deduction, e.g., that the claimed
expenses were ordinary and necessary for the production
of income in a trade or business.
Revenue rulings do not have the force of law and are merely
statements of the Commissioner’s litigating and administrative
position. Dixon v. United States, 381 U.S. 68, 73 (1965).
They are not binding on courts, see, e.g., Stubbs, Overbeck &
Associates v. United States, 445 F.2d 1142, 1146-1147 (5th Cir.
1971), but may be helpful and persuasive, Twin Oaks Cmty., Inc.
v. Commissioner, 87 T.C. 1233, 1252 (1986).
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011