John A. Walz, Jr. - Page 11

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          not establish that the Schedule C expenses were ordinary and                
          necessary business expenses of petitioner.  At trial, the parties           
          treated these deductions as though they were claimed as employee            
          business expenses and so shall we.                                          
               In this posture of the case, we must decide whether the                
          expenses in question are deductible as ordinary and necessary               
          business expenses of petitioner’s employment.  Our findings in              
          this record are based in part upon the testimony of petitioner.             
          Our evaluation of petitioner’s testimony is founded upon “the               
          ultimate task of a trier of the facts – the distillation of truth           
          from falsehood which is the daily grist of judicial life.”  Diaz            
          v. Commissioner, 58 T.C. 560, 564 (1972).  In this case, we found           
          petitioner to be an honest, sincere, and credible witness.                  
               Section 162(a) allows a deduction for all the ordinary and             
          necessary expenses paid or incurred during the taxable year in              
          carrying on any trade or business.  To be deductible as a                   
          business expense, the expenditure must relate to activities which           
          constitute the current carrying on of an existing trade or                  
          business.  Corbett v. Commissioner, 55 T.C. 884, 887 (1971).                
          Whether activities carried on by an individual can be                       
          characterized as a trade or business is a question of fact.  Id.            
          at 887.  This Court has long held that a taxpayer may be in the             
          trade or business of being an employee.  Primuth v. Commissioner,           
          54 T.C. 374, 377 (1970).                                                    






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