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business expenses. Petitioners argue that Elvin, on behalf of
YOC, entertained potential customers, some of whom purchased new
automobiles from YOC on an annual basis. Petitioners argue that
General Motors encouraged Elvin to entertain potential customers
and that entertainment was a necessary expense to attract
purchasers of high-priced Cadillac automobiles.
Respondent argues that petitioners have not substantiated
the business, as opposed to the personal, nature of any of the
claimed travel and entertainment expenses that respondent
disallowed and treated as constructive dividends to Elvin.
Petitioners have not offered any documentary evidence or
other credible substantiation to support the business nature of
the claimed travel and entertainment expenses disallowed by
respondent.
We sustain respondent's determination that for 1983, 1984,
and 1985, the claimed travel and entertainment expenses of
$22,014, $14,012, and $22,080, respectively, are to be
disallowed, and Elvin is to be treated as receiving constructive
dividends for the same years and in the same amounts.
Additional Personal Expenses of Elvin Paid by YOC -- Claimed
Business Expenses and Constructive Dividends
Petitioners make no persuasive argument and offer no
credible evidence that any of the expenses in question under this
category (1983 -- $65,487; 1984 -- $43,495; 1985 -- $74,798; and
1986 -- $15,136) qualify as valid business expenses of YOC. Many
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