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Petitioners’ Return
Petitioners claimed deductions for certain expenses on
Schedule A, Itemized Deductions, on their joint return for 2003.
Respondent examined petitioners’ return for 2003 and issued
petitioners a deficiency notice in which he disallowed many of
the expense deductions. Of the expenses still in dispute,4
petitioners assert they are entitled to deduct unreimbursed
employee expenses related to Mr. Riley’s NWA mechanic job. The
unreimbursed employee business expenses petitioners claimed
include $5,596 of vehicle expenses, $38 of travel expenses, and
$3,162 of meals5 while Mr. Riley worked in Newark. The
unreimbursed employee business expenses also include the
following non-travel related expenses: $296 for depreciation of
tools, $75 of Internet expenses, $960 of cellular telephone
expenses, $1,106 of equipment expenses, $80 for safety glasses,
$102 for safety shoes, and $822 for maintenance of uniforms.
4Respondent concedes that petitioners are entitled to deduct
State and local income taxes, real estate taxes, home mortgage
interest, gifts to charity, tax preparation fees and a portion of
the union dues claimed on the return for 2003. Petitioners
concede the deductions claimed for miscellaneous supplies, costs
of tools, investment fees, IRA fees, and $4 of the $708 union
dues.
5The gross amount of meals expenses petitioners claimed on
the return is $4,864. Petitioners multiplied the meals expenses
by 65 percent, the applicable percentage allowable only for
employees subject to Department of Transportation hours of
service limits (DOT percentage). Sec. 274(n)(3). We need not
decide whether petitioners are entitled to use the DOT percentage
as Mr. Riley was not away from home.
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Last modified: November 10, 2007