| Vitale v. Commissioner | |
| Court: | United States Tax Court |
| Full Name: | Ralph Louis Vitale, Jr. v. Commissioner of Internal Revenue |
| Citations: | T.C. Memo 1999-131; 77 T.C.M. 1869 |
| Judges: | William M. Fay |
| Decision By: | Fay |
| Lawsapplied: | Internal Revenue Code ยง 162(a) |
| Italic Title: | yes |
Vitale v. Commissioner, T.C. Memo 1999-131 (1999)[1] is a case that demonstrates a policy limit on the deduction of business expenses.
The taxpayer began visiting legal brothels in order to develop characters for a book called "Searchlight, Nevada."[2] He kept detailed entries of his experience with prostitutes and brothels including "the matter in which he selected her, the house rules of the brothel, the manner in which he negotiated a price for her time, their dialogue, and the type of clothing worn by her."[1] The taxpayer also spent time promoting his book and working on its publication.
Section 162(a) of the Internal Revenue Code (I.R.C.) allows deductions for all the "ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business..."
Does section 162(a) allow for the deduction of the expenses to the taxpayer in visiting brothels in order to research his upcoming novel?
Despite falling under the plain meaning of section 162(a), the taxpayer's expenses were not deductible. The court found a public policy exception to the statute. The court found that "expenditures incurred by petitioner to visit prostitutes are so personal in nature as to preclude their deductibility."[1]
The I.R.C. contains a number of policy exceptions on deductions for business expenses: