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4. Office Supplies
Petitioners claimed a $9,023 deduction for office supplies.
While they provided copies of numerous receipts, checks, and charge
card billing statements to support their claimed deduction,
petitioners failed to show that the expenses were ordinary and
necessary to the conduct of petitioner’s business or the
reasonableness of these expenses. Again, the record reveals that
petitioners attempted to deduct personal expenses as business
expenses. This is not permitted; the claimed deductions are not
allowable.
5. Employee Benefits
Petitioners claimed a $1,424 employee benefit program expense.
Such expense related to petitioner’s life insurance policies. This
expense was not shown to be a properly allowable business expense.
6. Travel/Meal and Entertainment Expenses
Petitioners claimed $7,465 in travel expenses and $4,832 in
meal and entertainment expenses.
Section 274(d) requires that a taxpayer substantiate by
adequate records or by sufficient evidence corroborating his own
statement expenses claimed for travel and entertainment by showing
(1) the amount of the expense, (2) the time and place of travel or
entertainment, (3) the business purpose of the travel or
entertainment, and (4) the business relationship to the taxpayer of
each person entertained. These four elements must be established
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