March 3, 2020

2020 – 02/25

Good records are the key to tax deductions. In one case, an independent insurance agent’s claims for a variety of business deductions were largely denied. Notably, the U.S. Tax Court found he double counted some expenses. Also, his substantiation for various other items consisted of cancelled checks or credit card/ bank statements that showed expenses were paid, but they were made for such things as doctor visits, gas, and department store purchases for which there was no proof of a business purpose. However, he did substantiate some contract labor expenses to various persons for referrals and other services, including bookkeeping and answering phones. (TC Memo 2020-25)