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C. Statutory Employee
As the Court has concluded that petitioner was a common law
employee of TIG for taxable year 2000, petitioner is precluded
from being a statutory employee pursuant to section 3121(d)(3).
Accordingly, petitioner is not entitled to deduct expenses on
Schedule C.
IV. Petitioner’s Deductions
In light of the Court’s conclusion that petitioner is not
entitled to deduct expenses on Schedule C, the Court must now
decide whether petitioner is entitled to deduct expenses incurred
in connection with his employment on Schedule A. See sec. 67(a).
A. Schedule A Deductions
An individual performing services as an employee may deduct
miscellaneous itemized deductions incurred in the performance of
services as an employee only to the extent such expenses exceed 2
percent of the individual’s adjusted gross income. Sec. 67(a).
B. General Deduction Rules
Deductions are a matter of legislative grace, and the
taxpayer bears the burden of proving that he is entitled to any
claimed deductions. INDOPCO, Inc. v. Commissioner, 503 U.S. 79,
84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440
(1934). Taxpayers must maintain records relating to their income
and expenses and must prove their entitlement to all claimed
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Last modified: November 10, 2007