Tax research
Facts#1: Late Co Paid towing costs when overdue fines caused a truck to be impounded.
Question: Is Late Co allowed a deduction for this amount of towing costs as a business expense even though it is result from overdue fines?
Relevant law:§162(a)of the Internal Revenue Code allows all the ordinary and necessary expenses as a deduction, if they are paid or incurred during the taxable year in carrying on any trade or business. However, §162(f) shows that no deduction shall be allowed under subsection (a) for any fine or similar penalty paid to a government for the violation of any law.
K.A Baratelle, 80 TCM 737, Dec.53.130(M) shows that Traffic fines and towing costs paid in connection with fines were nondeductible expenses. Because under §162(f) they are cost paid to a government for the violation of traffic law. Moreover, in case J.B.Miller,Jr 72 TCM 709, Dec.51.568(M), requirement that an owner and operator of a scrap metal deduct as business expense was denied. Because the claimed fines and losses were result from nondeductible traffic fines.
Conclusion: Since the towing cost was incurred by overdue fines causing a truck to be impounded, in other words, it caused by nondeductible traffic fines, it should be excluded from business expense.
Facts: #2, Moved by a segment on 60 minutes, the taxpayer decided to donate a kidney to a young boy living in another city. Since the boy had no insurance, she incurred significant unreimbursed costs for transportation to the hospital where the transplant took place.
Question: Is the taxpayer allowed a Medical deduction for this amount of transportation costs which is incurred by donating a kidney to a boy?
Relevant law: §213(a) of the Internal Revenue Code allows a deductible expense for medical care of taxpayer which is not compensated for by insurance or otherwise. §213(d)(1)(B) shows “Medical care” is