Opinion ID: 804193
Heading Depth: 4
Heading Rank: 1

Heading: Schedule C Deductions

Text: Most of the Robinsons’ claimed expenses on their Schedule C for each year relate to Donald’s use of his home office, e.g., for the business use of the home, office expenses, repairs and maintenance, supplies, and utilities. Such deductions are permitted only for the allocable portion of a residence that is used exclusively and on a regular basis 5 as a taxpayer’s principal place of business. § 280A(a) and (c); Comm’r v. Soliman, 506 U.S. 168, 173 (1993). The business use must be more than occasional or incidental. Jackson v. Comm’r, 76 T.C. 696, 700 (1981). The Tax Court considered the evidence that Donald, a full-time employee of Rowan University, completed only minimal work for Temple each year. The Tax Court properly concluded that Donald had failed to offer evidence that proved regular use of the office to satisfy § 280A, and therefore correctly sustained the disallowance of those expense deductions. A portion of their claimed home expenses was for use of a cellular phone and computer. Such expenses are subject to the strict substantiation requirements of § 274(d) because they are “listed property” under that section and under § 280F(d)(4). The Robinsons failed to present any evidence establishing the business use of these items, and thus, the Tax Court properly concluded that the claimed expenses were unallowable. Likewise, the Robinsons failed to substantiate the business use of Donald’s 2004 Chrysler Pacifica. See §§ 274(d) and 280F(d)(4) (listing passenger automobiles). The Robinsons did not provide a travel log documenting business trips or any evidence explaining how and why he traveled tens of thousands of miles for relatively few days of teaching at Temple, nor did they explain how they allocated expenses including loan payments and repairs to Donald’s business use. Accordingly, we find no error with the Tax Court’s decision sustaining the disallowance of the Robinsons’ car and truck expenses. 6 Finally, the Tax Court did not err in sustaining the disallowance of the deductions claimed for travel, meals, and entertainment, as the Robinsons provided no evidence to support the business purpose of those expenses. The Tax Court also correctly sustained the IRS on the matter of the Robinsons’ claimed “other expenses,” which allegedly represented necessary publications that Donald used in his work for Temple. However, they provided only canceled checks and credit card statements for the 2004 expenses, with no details about specific purchases. For the 2005 expenses, the Robinsons provided receipts. However, the receipts totaled less than the amount they claimed as a deduction, most were clearly not related to Donald’s work with Temple, and Donald did not explain or provide evidence of the business purposes of the remainder. 2