Robert A. White - Page 10
- 9 -
ordinary and necessary for petitioner’s business. Respondent
asserts that petitioner was eligible for reimbursement from DHS
for expenses incurred performing his duties.
Section 162 allows deductions for all ordinary and necessary
business expenses paid or incurred during the taxable year in
carrying on a trade or business. Performing services as an
employee constitutes a trade or business. Primuth v.
Commissioner, 54 T.C. 374, 377-378 (1970). Those expenses that
are (1) ordinary and necessary to the taxpayer’s business and (2)
paid or incurred in a given year are deductible that year. Sec.
162(a); see sec. 1.162-17(a), Income Tax Regs. However,
personal, living, or family expenses are not deductible. See
secs. 162(a), 262(a); sec. 1.162-17(a), Income Tax Regs.
Certain categories of expenses must also satisfy the strict
substantiation requirements of section 274(d) before those
expenses will be allowed as deductions. Expenses subject to
section 274(d) include travel and meal expenses, as well as
expenses for listed property, such as passenger automobiles,
computers, and cellular telephones. Secs. 274(d), 280F(d)(4).
The taxpayer must substantiate the amount, time, place, and
business purpose of the expenditures and must provide adequate
records or sufficient evidence to corroborate his own statement.
See sec. 274(d); sec. 1.274-5T(c)(1), Temporary Income Tax Regs.,
50 Fed. Reg. 46016 (Nov. 6, 1985). In order to meet the
Page: 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Last modified: March 27, 2008