Tax Code
The applicable sections of the Tax Code are §§ 162 and 262. These sections must always be looked at together, because § 162 generally allows a deduction for ordinary and necessary expenses incurred in a trade or business while § 262 disallows deductions for all personal, living, or family expenses.
Specifically, § 162(a) states that “there shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business….” Then, it lists three things that are ordinary and necessary expenses, none of which expressly or implicitly would include the work clothes at issue here. Thus, § 162 is not very helpful for Mrs. Pevsner.
Even less helpful, is § 262. This section holds that “xcept as otherwise expressly provided in this chapter, no deduction shall be allowed for personal, living, or family expenses.” Clothing being inherently personal, it seems that the Tax Code cuts against the argument of allowing a deduction here. Although, perhaps if the clothing were made impersonal, via a gaudy nametag or store logo attached, a deduction would be allowed. Unfortunately, at a high-end clothing boutique neither of those is likely.
Read more about this topic: Pevsner V. Commissioner
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