- 29 -
time and place the expense was incurred, (3) the business purpose
of the expense, and (4) the business relationship to the taxpayer
of each expense incurred. Sec. 1.274-5T(b)(4), Temporary Income
Tax Regs., 50 Fed. Reg. 46015 (Nov. 6, 1985). See supra pp. 9-
10.
At trial, petitioner's testimony regarding his travel, meal,
and entertainment expenses was evasive, and in many instances
implausible. For example, in response to a question asked by
this Court as to whether petitioner was reimbursed for a hotel
bill at the Victoria Inn in Monterey, which allegedly was
incurred for surveillance purposes, he evaded the question by
responding: "I just include my hourly rate on them." Petitioner
was then asked whether this response implied that he incurred
such hotel and meal expenses for business purposes without
reimbursement from his clients. Petitioner replied: "If I
didn't eat the business, pretty soon [the clients] were going to
somebody else and I was getting absolutely nothing."
Petitioner's statement is not credible. Moreover, the evidence
submitted at trial establishes that in many instances, petitioner
did bill his clients for meals, lodging, and mileage. Whether
such expenses were reimbursed by petitioner's clients or were
personal expenses, they are not deductible.
Furthermore, petitioner's evidence is inconsistent. For
example, he submitted two checks in connection with the same trip
to Sun Valley, which he allegedly made for surveillance purposes.
Page: Previous 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 NextLast modified: May 25, 2011