- 14 -
U.S. 488, 495 (1940). A “necessary” expense is one that is
“appropriate and helpful” to the taxpayer’s business. Welch v.
Helvering, 290 U.S. 111, 113 (1933). Expenses allowable under
section 162 must be “directly connected with or pertaining to the
taxpayer’s trade or business”. Sec. 1.162-1(a), Income Tax Regs.
Personal, living, and family expenses are not deductible. Sec.
262(a).
An employee is generally recognized as being in the trade or
business of being an employee, and may deduct employment-related
expenses if the requirements of section 162 are met.
Commissioner v. Flowers, 326 U.S. 465 (1946). However, “A trade
or business expense deduction is not allowable to an employee to
the extent that the employee is entitled to reimbursement from
his or her employer for an expenditure related to his or her
status as an employee.” Lucas v. Commissioner, 79 T.C. 1, 7
(1982). If an employee could have requested reimbursement under
the plan and fails or forgets to do so, he may not claim a
deduction for the expenses under section 162. Id.; see also
Orvis v. Commissioner, 788 F.2d 1406 (9th Cir. 1986), affg. T.C.
Memo. 1984-533; Kennelly v. Commissioner, 56 T.C. 936, 943
(1971), affd. without published opinion 456 F.2d 1335 (2d Cir.
1972).
In this case, petitioner claimed a deduction for
unreimbursed employee business expenses totaling $16,293.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011