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deductions, credits, and expenses in controversy. See Sec. 6001;
Rule 142(a).
Pursuant to section 162(a), a taxpayer is entitled to deduct
all of the ordinary and necessary business expenses paid or
incurred during the taxable year in carrying on a trade or
business. The deduction for an employed individual’s
unreimbursed business expenses under section 162 is claimed on
Form 2106, Employee Business Expenses, and included in the
miscellaneous itemized deductions taken on Form 1040 Schedule A.
Expenses incurred in the performance of services as an employee
are to be reported and memorialized as required by the
regulations promulgated under section 162. See sec. 1.162-17(a),
Income Tax Regs. The taxpayer bears the burden of proving that
the claimed expenses were ordinary and necessary according to
section 162. The employee must show the relationship between the
expenditures and the employment. See Evans v. Commissioner, T.C.
Memo. 1974-267, affd. in part, revd. in part 557 F.2d 1095 (5th
Cir. 1977). In certain instances, the taxpayer must meet
specific substantiation requirements in addition to the
requirements of section 162. See sec. 274.
Generally, a claimed expense (other than those subjected to
heightened scrutiny under section 274) may be deductible even
where the taxpayer is unable to fully substantiate it, if there
is an evidentiary basis for doing so. Cohan v. Commissioner, 39
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Last modified: November 10, 2007