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Petitioners do not limit an employee's activities when he or she
travels to or from work in uniform. The employees who travel
from work in uniforms typically change their uniforms before
going out on personal business after work, but some uniformed
employees have gone out after work in uniform and eaten at a
competitor's restaurant.
Petitioners make no attempt to account for the actual cost
of the meals that are served at the Cafeterias. In the case of
Stardust, petitioners expense a flat charge per month, regardless
of the number of meals served, based on an estimate of food costs
that was made before the subject years. For the other
Properties, petitioners multiply a fixed amount (ranging from
$1.75 to $2) by the number of full-time employees on the rolls of
each department in each month. In accordance with this expending
policy, petitioners ascertained that their direct costs for the
Cafeterias for the 1987 and 1988 taxable years were as follows:
1987 1988
CHC $459,205 $616,483
Fremont 372,705 388,546
Sam's Town 741,366 811,628
Stardust 1,215,638 2,030,010
Total 2,788,914 3,846,667
Petitioners deducted all of these costs, with the exception of
the following amounts for 1987:
CHC $68,044
Fremont 45,781
Sam's Town 98,012
Stardust 145,978
Total 357,815
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