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Petitioner’s Packs to Go activity began in 1996 as a packing,
shipping, and moving service.6 Petitioner had already been
offering business management and consulting services. In 2002,
petitioner expanded her business activity to include “business
prep, marketing, drawing up business plans, where to find start-up
money, computer services and video recording services.” Packs to
Go, according to the Schedule C petitioner prepared, employed the
accrual method of accounting.
Respondent disallowed all of petitioner’s claimed Schedule C
deductions because, according to respondent, petitioner has not
shown that Packs to Go was a trade or business for which
petitioner is entitled to Schedule C deductions. Continuing,
respondent asserts that even if Packs to Go were an activity
engaged in for profit, petitioner’s claimed expenses were not
adequately substantiated.
Discussion
In general, section 162(a) allows a deduction for all
ordinary and necessary expenses paid or incurred during the
taxable year in carrying on a trade or business. In order for an
activity to be considered a trade or business for the purposes of
5(...continued)
activity on Schedule C for either 2001 or 2003.
6It does not appear that any registration formalities were
in place with respect to Packs to Go. We infer from the record
that the name Packs to Go was first employed in 1996 and
encompasses all services available from petitioner.
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