The Tax Court upheld the IRS’s rejection of a transportation manager’s insufficiently substantiated deduction for unreimbursed employee business expenses.
In an October 30 summary opinion in Harrell v. Commissioner, Chief Special Trial Judge Lewis R. Carluzzo found that Andrew and Katherine Harrell weren’t entitled to a deduction on their 2017 tax return for a combination of unreimbursed expenses related to Andrew’s employment.
At different times in 2017, Harrell was employed as a transportation manager for both Goodwill and GPR Logistics LLC, and he managed a bus fleet that served a senior citizen residential complex for Village Management Services Inc.
Harrell traveled frequently for his roles at Goodwill and GPR, occasionally using his personal vehicles. He also attended transportation industry expos to research vehicle options for his employers. He claimed a tax deduction for unreimbursed employee business expenses that included meal, vehicle, travel, and entertainment expenses and equaled approximately 50 percent of his income.
The IRS disallowed the entire deduction, claiming Harrell failed to establish that the expenses were paid or incurred during the tax year and that they were ordinary and necessary to his employment.
Carluzzo explained that section...
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