Steven Dean on Business Deductions and Racial Disparities

What can you write off as a business expense? At the most general level, section 162 says “all the ordinary and necessary expenses” for the trade or business, as long as they are not disallowed elsewhere in the Code. But what is “ordinary” and what is “necessary”?

Professor Steven Dean points out that the “ordinary” requirement, by definition, favors the common practice and, therefore, disfavors the minority. What may seem merely surprising (or even shocking in some cases) may also reveal systemic privilege or even racism.  As a casebook author himself, Professor Dean believes that its important for legal educators to provide relevant context, including about race, for students to draw their own conclusions. Professor Dean is a professor of law and the Paul Siskind Research Scholar at Boston University School of Law.

Tax Class is hosted by ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ben Leff⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and produced by Tony Xu. The theme music is by Doo Dah Music. None of the information presented in this podcast constitutes legal advice. Consult an attorney or a tax professional for guidance.

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IN THIS EPISODE

·       IRC §§ 162(c), (f), (g); 280E

·       Kopp’s Company, Inc. v. United States, 636 F.2d 59 (4th Cir. 1980)

·       Cavanaugh v. Commissioner, T.C. Memo. 2012-324

·       Gilliam v. Commissioner, 51 T.C.M. 515 (1986)

·       Dancer v. Commissioner, 73 T.C. 1103 (1980)