Opinion ID: 804193
Heading Depth: 4
Heading Rank: 2

Heading: Schedule A Deductions

Text: Employees can deduct unreimbursed business expenses using Schedule A only to the extent such expenses exceed two percent of the individual’s adjusted gross income. § 67(a). For both years, the Robinsons claimed gasoline, oil, repairs, vehicle insurance, and mileage for Marlene’s use of the couple’s Chrysler Sebring as unreimbursed business expenses. However, as with Donald’s car, the Robinsons failed to provide any evidence to substantiate the business purposes of the claimed expenses, as § 274(d) requires. 2 The Robinsons do argue that the Tax Court erred in considering one of his purchases—a biography of Frank Lloyd Wright—personal in nature. However, we cannot say that the Tax Court clearly erred, and in any event, such an error would be de minimis in nature in light of the thousands of dollars in unsubstantiated deductions. 7 Accordingly, the Tax Court properly found that they were not entitled to those deductions. From the little evidence provided, the Tax Court could not determine how the Robinsons arrived at the remainder of the expenses they reported for Marlene. They did not produce any records to document the purposes of their claimed expenses, and what records and receipts they did provide were uncategorized and not tied to the amounts reported on their Schedule A. Marlene testified that she and her family took trips and visited museums and tourist sites for business purposes (“benchmarking”). The Tax Court rejected her claim, as the evidence provided showed expenditures for family trips to Disneyland and Disney World, hotel stays, retail items, and airfare for Marlene, Donald, their daughter, and, in one case, for Marlene’s mother and Donald’s mother. The Tax Court reasonably determined that the Robinsons failed to demonstrate that their expenses were not primarily personal, and were ordinary and necessary for Marlene’s employment. See § 162(a). Finally, the Tax Court noted that the Robinsons had failed to offer any evidence whatsoever to substantiate the Schedule A expenses claimed by Donald as unreimbursed business expenses or for their tax preparation expenses. Accordingly, we find no error in the Tax Court’s decision to sustain the IRS’s disallowance of those expenses.