Opinion

Short Summary:

• This case involves disallowance of itemized business expense deductions claimed by Mark Ryan Pedersen for the 2016 tax year. Pedersen resided in Oregon and worked as a project manager at JE Dunn Construction Co. He was assigned to oversee JE Dunn project sites. In 2016 JE Dunn asked Pedersen to oversee projects in California. Pedersen incurred what he claimed were employee business expenses incurred during travel between cities in California and his then-current residence in Oregon. On his tax return, he reported wages of $96,265 from Form W–2, showing earnings in both Oregon and California, offset in part by miscellaneous itemized deductions of $31,638 claimed on Schedule A, Itemized Deductions. He attached a Form 2106–EZ, Unreimbursed Employee Business Expenses, reporting unreimbursed employee business expenses of $24,201 claimed as Schedule A miscellaneous deductions – vehicle expenses, parking fees, tolls and transportation expenses (collectively, transportation expenses), travel expenses while away from home overnight, and meals and entertainment expenses. In preparation for trial, Pedersen prepared a log or schedule of expenses in each category. He did not explain the specific business purpose for any of the expenses, and he produced nothing to show the terms of employment that he claimed required that he travel to California for work. The IRS disallowed the deductions. Pedersen asked the Tax Court to review that determination.

Key Issues:

• Whether Pedersen petitioner is entitled to a deduction for unreimbursed employee business expenses for tax year 2016?

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