Sproul v. State Tax Commission

Plaintiff brings this suit to set aside a deficiency assessment resulting from defendant’s rejection of a claimed deduction for expenses incurred in defending a murder charge. Defendant appeals from a decree of the Oregon Tax Court allowing the deduction as an “ordinary and necessary” expense incurred by plaintiffs in carrying on their business. The applicable statute is ORS 316.305 (1), which reads as follows:

“In computing net income there shall be allowed as deductions:

“(1) All the ordinary and necessary expenses, paid during the tax year in carrying on any trade or business, including * *

Pl…