Case: Proof Lacking that Expenses Were Ordinary, Necessary (T.C. Summ.) (IRC §162)

Taxpayers unable to carry their burden of proof that purported business expense deductions qualified as ordinary and necessary, the U.S. Tax Court held in a nonprecedential summary opinion. Taxpayer engaged in networking marketing and incurred expenses (advertising, car/truck, legal, and “other”) in excess of his reported Schedule C income. The IRS denied the deductions for lack of substantiation. Taxpayers failed to carry their burden of proving that the charges and bank withdrawals represented “ordinary and necessary” business expenses as opposed to nondeductible personal expenses, the court held. Taxpayer failed to provide the business purpose of credit card transactions and could ...