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According to petitioners, petitioner’s participation in the
TRS program constituted a trade or business within the meaning of
section 162, and the deductions claimed on the Schedule C should
be allowed. According to respondent, petitioner’s participation
in the TRS program did not constitute a trade or business and,
with minor exceptions, the expenses shown on the Schedule C are
not otherwise deductible.2 For the following reasons, we agree
with respondent.
Petitioners bear the burden of proving that: (1)
Petitioner’s participation in the TRS program constituted a trade
or business within the meaning of section 162(a) during 2000; (2)
the expenses underlying the deductions here in dispute were
ordinary and necessary to that trade or business; and (3) the
expenses were paid or incurred.3 Rule 142(a); INDOPCO, Inc. v.
Commissioner, 503 U.S. 79, 84 (1992); New Colonial Ice Co. v.
Helvering, 292 U.S. 435, 440 (1934); Welch v. Helvering, 290 U.S.
111 (1933).
After attending a seminar conducted by Renaissance,
petitioner submitted an application to participate in TRS. As an
active TRS participant, petitioner was required to pay a monthly
2 At trial, respondent conceded that the “bonuses” of
$2,914 petitioner received from Renaissance were not includable
in petitioners’ income.
3 Under the circumstances, the burden of proof remains with
petitioners in this case. See sec. 7491.
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