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testimonial evidence to substantiate any amount in excess of what
respondent conceded. For the meals and entertainment expenses,
petitioner’s “substantiation” consists merely of receipts and a
smattering of testimony regarding these meal items, which, at
best, establish that money was spent. Petitioner failed to
reveal the business purpose of each meal and/or the business
relationship of the person entertained, as is required by section
274(d). In addition, some of the receipts do not reveal the time
and place of the meetings, while others pertained to meetings
that occurred during a taxable year not before the Court.
Several receipts reflect large expenditures for food and
drink for many people. Petitioner explained that Stewart had
several rules (such as not being late for a bus) which, if
violated, required the “guilty” person to pick up the restaurant
tab for the entire band. These may or may not be Stewart’s
rules, but we know of no authority to support a finding that such
activities constitute ordinary and necessary expenditures.
Petitioner claimed deductions for depreciation expense in
the amount of $1,673 and professional supplies in the amount of
$17,329. To support these deductions, petitioner submitted
receipts and invoices totaling $17,132. Respondent concedes that
petitioner spent $17,132 on musical equipment and supplies during
1991, of which $825 is currently deductible and $16,307 is
nondeductible, but depreciable. Despite these concessions,
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