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disallowance of the disputed remaining medical expenses is
sustained.
Schedule C Expenses
Deductions are a matter of legislative grace, and taxpayers
bear the burden of proving that they are entitled to any
deductions claimed. Rule 142(a); INDOPCO, Inc. v. Commissioner,
503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292
U.S. 435, 440 (1934). Taxpayers are required to maintain
sufficient records to enable the Commissioner to determine their
correct tax liability. Sec. 6001.
Section 162 generally allows a deduction for all the
ordinary and necessary expenses paid or incurred during the
taxable year in carrying on any trade or business. Such expenses
must be directly connected with or pertain to the taxpayer’s
trade or business. Sec. 1.162-1(a), Income Tax Regs. Whether an
expenditure satisfies the requirements of section 162 is a
question of fact. Commissioner v. Heininger, 320 U.S. 467, 475
(1943).
Whether a taxpayer’s activities constitute the carrying on
of a trade or business requires an examination of the particular
facts and circumstances of each case. Commissioner v.
Groetzinger, 480 U.S. 23, 36 (1987). Carrying on a trade or
business requires a showing of more than an initial investigation
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Last modified: March 27, 2008