Are taxpayers required by law to claim all expenses pertaining to their business?
Yes. A self-employed individual is required to report all income and deduct all expenses. Revenue Ruling 56-407, 1956-2 C.B. 564, deals with the issue of taxpayers not taking all allowable deductions in computing net earnings from self-employment for self-employment tax purposes. Rev. Rul. 56-407 held that under §1402(a), every taxpayer (with the exception of certain farm operators) must claim all allowable deductions in computing net earnings from self-employment for self-employment tax purposes.
From https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-asked-questions/earned-income-self-employme...
