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entertainment expense deductions for the period before the Board
of Tax Appeals. We concluded that he had spent much for these
purposes and that expenditures of that sort were deductible.
Nevertheless we did not allow any deduction, because the taxpayer
could not give specific information as to any particular
expenditure. The Circuit Court of Appeals for the Second Circuit
directed as follows:
the Board should make as close an approximation as it can, bearing
heavily if it chooses upon the taxpayer whose inexactitude is of
his own making. But to allow nothing at all appears to us
inconsistent with saying that something was spent. True, we do not
know how many trips Cohan made, nor how large his entertainments
were; yet there was obviously some basis for computation, if
necessary by drawing upon the Board's personal estimates of the
minimum of such expenses. * * * [Cohan v. Commissioner, 39 F.2d at
544.]
Section 162(a)13 allows a deduction for "all the ordinary
and necessary expenses paid or incurred during the taxable year
in carrying on any trade or business". Section 1.162-1(a),
Income Tax Regs., provides the general rule that deductible
business expenses "include the ordinary and necessary
expenditures directly connected with or pertaining to the
taxpayer's trade or business". Thus, to satisfy the requirements
of section 162(a), an expense must be ordinary and necessary and
13Sec. 162(a) provides, in pertinent part, as follows:
SEC. 162. TRADE OR BUSINESS EXPENSES.
(a) In General.--There shall be allowed as a deduction
all the ordinary and necessary expenses paid or incurred
during the taxable year in carrying on any trade or
business, * * *
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