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respondent. Accordingly, respondent’s determination on this
issue is sustained.
C. Unreimbursed Employee Expenses
On petitioner’s Schedule A filed with his Federal income tax
return for taxable year 2000, petitioner deducted unreimbursed
employee expenses of $2,750 and tax preparation fees of $125.
Respondent determined that petitioner did not adequately
substantiate unreimbursed employee expenses above the amount of
$1,313. Accordingly, respondent allowed a deduction for “job
expenses and most other miscellaneous deductions” for taxable
year 2000 of $1,438.9
As previously stated, section 162(a) allows a deduction for
ordinary and necessary business expenses paid or incurred during
the taxable year in carrying on any trade or business. For an
expense to be “ordinary” the transaction that gives rise to the
expense must be of a common or frequent occurrence in the type of
business involved. Deputy v. du Pont, 308 U.S. at 495. To be
“necessary” an expense must be “appropriate and helpful” to the
taxpayer’s business. Welch v. Helvering, 290 U.S. at 113-114.
The performance of services as an employee constitutes a
trade or business. See sec. 1.162-17(a), Income Tax Regs. The
employee must show the relationship between the expenditures and
9Respondent calculated this amount by adding the
substantiated claimed unreimbursed employee expenses of $1,313 to
the tax preparation fees allowed of $125.
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