Need to Substantiate “Other Deductions”

A self-employed individual who earned a living producing commercials for radio and television and provided services as an audio technician and musician claimed “other deductions” on Schedule C. These were purportedly for bank charges, cell phone expenses, uniforms, reeds/cases/cable costs, software subscription charges, miscellaneous expenses and collection expenses. He could not produce invoices, receipts, or similar records to substantiate most of the expenses in question. Result: Most of the expenses were disallowed by the Tax Court on June 29, 2021. What’s more, he was subject to a 20% penalty. Lesson: Keep good records and specify deductible items on Schedule C (don’t lump them as “other expenses”). #IdeaoftheDay