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of these expenses relate to Elvin's residence and his family,
such as the payments made to Elvin's housekeeper, and gasoline
credit cards used by Elvin and his family for personal travel.
We sustain in full respondent's disallowance to YOC of these
claimed business expenses, and we sustain respondent's
determination that these payments by YOC should be treated as
constructive dividends to Elvin.
Travel Awards
Generally, gross income includes the value of prizes and
awards. Sec. 74(a).
Petitioners argue that the cost of the trips to Europe
should not be treated as income to Elvin because the trips were
related to the business of YOC and because on each trip Elvin
attended conferences regarding the automobile business. The
evidence, however, indicates that these trips actually
represented promotional awards received by Elvin from General
Motors. The business necessity associated with these trips has
not been established.
We conclude that the cost of the travel awards received by
Elvin from General Motors represents taxable income to Elvin.
Additions to Tax
Respondent determined that as to Elvin for each of the years
1983, 1984, 1985, and 1986, and as to YOC for each of the years
1983, 1984, and 1985, the fraud addition to tax should apply.
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