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business (essentially as a form of advertising or promotional
expense). The basis for this contention is that his socializing
at art functions and his activity as an artist afforded him an
opportunity to meet potential clients and promote his accounting
practice.
To prevail on this theory, petitioner must show that the
expenditures were made primarily for business purposes. Hahn v.
Commissioner, T.C. Memo. 1979-429. Also, it must be shown that
there is a proximate rather than a remote or incidental
relationship between the expenditures and the business concerned.
Henry v. Commissioner, 36 T.C. 879 (1961); Boomershine v.
Commissioner, T.C. Memo. 1987-384; Hahn v. Commissioner, supra.
The mere fact that engaging in an activity affords contact with
possible future customers or clients is in and of itself
insufficient to justify deducting the cost of the activity as a
business expense. Hahn v. Commissioner, supra.
Petitioner has not shown a business purpose for the
expenditures or that there was a proximate relationship between
the expenditures from his artist activity and his accounting
business. Accordingly, none of these expenditures are deductible
under section 162 as ordinary and necessary business expenses of
his accounting business.
Substantiation
Although petitioner's artist activity was "not engaged in
for profit" within the meaning of section 183(c), petitioner may
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