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the disallowance provisions of section 274(a)(1)(B), see, e.g.,
section 274(e), none applies here. The expenses of leasing the
boats are not deductible.4
Petitioner alternatively contends that, if the corporation
is not allowed to deduct the boat lease payments, we should
accord him some relief because, as a result of the disallowance,
he is being taxed twice on the same income. He points out that
the disallowance of his corporation’s boat lease deductions
increases the passthrough income he is required to report on his
individual returns by the amount of the deductions. Because the
4 Petitioner argued at trial and on brief that his
substantiation of the business use of the boats met the
requirements of sec. 274(d). We disagree. Sec. 274(d) requires
a taxpayer to demonstrate the amount, the time and place, and the
business purposes which give rise to his claimed business
entertainment expenses “by adequate records or by sufficient
evidence corroborating * * * [his] own statement”. At trial
petitioner attempted to present summaries gleaned from office
records and prepared by someone on his staff. These summaries
failed to meet the requirements for admissibility under Fed. R.
Evid. 1006. Moreover, they failed to include information with
respect to the business purpose of the boat utilizations. See
S. Rept. 1881, 87th Cong., 2d Sess. (1962), 1962-3 C.B. 707, 741:
The requirement that the taxpayer's statements be
corroborated will insure that no deduction is allowed
solely on the basis of his own unsupported, self-
serving testimony. * * *
Generally, the substantiation requirements of the
bill contemplate more detailed recordkeeping than is
common today in business expense diaries. * * *
Thus, the boat lease deductions run afoul of both the
substantiation requirements of sec. 274(d) and the prohibition of
sec. 274(a)(1)(B).
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