Business Expense Deductions and Tax Court Interpretations

The deductibility of business expenses under Internal Revenue Code Section 162 has been the subject of extensive litigation before the US Tax Court. Understanding how the Court interprets these provisions is essential for both tax practitioners and business owners.

Ordinary and Necessary Standard

The Tax Court has consistently applied the "ordinary and necessary" test when evaluating business expense deductions. Recent cases have clarified what constitutes ordinary in various industries and what documentation is required to substantiate these deductions.