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The corporate petitioner claims that the Rolls Royce was an
ordinary and necessary tool for obtaining business referrals. In
this regard, Mohan Roy testified that he knew of many other doctors
who drove Rolls Royces for a similar purpose. As evidence of the
promotional value of the Rolls Royce, the individual petitioners
point to Roy, Inc.'s gross income during the years in issue
(ranging from $1.4 million to $2.4 million). Respondent counters
by noting that Mohan Roy decided to limit his use of the Rolls
Royce during the years in issue to avoid discouraging patient
referrals due to the declining economy.
The instant case is similar to Connelly v. Commissioner, T.C.
Memo. 1994-436, affd. without published opinion 99 F.3d 1154 (11th
Cir. 1996). In Connelly, a plastic surgeon was the sole officer
and shareholder of a medical corporation for which he provided the
medical services. Allegedly to promote and advertise his services,
the corporation leased a Rolls Royce Silver Shadow which the
shareholder purportedly used to attend medical conventions or for
other business purposes. We held in Connelly that the medical
corporation was not entitled to deduct the Rolls Royce expenses
because the corporation failed to show a proximate relationship
between the expenses paid and the promotion of the medical
practice. We therein stated:
We believe that the proposition that the leasing of the
Rolls Royce enhances petitioner's skill, usefulness, or
reputation as a physician is at best, dubious. In
addition, petitioners have failed to offer any evidence
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