- 9 -
determined from the evidence presented. Rule 142(a); Welch v.
Helvering, 290 U.S. 111 (1933); Allen v. Commissioner, T.C. Memo.
1988-166. Personal expenses are not deductible. Sec. 262.
In United States v. Gilmore, 372 U.S. 39, 48 (1963), the
Supreme Court held that the test as to whether legal fees are
business or personal expenses depends upon whether the claim
arises in connection with the taxpayer's profit-seeking
activities or his personal activities. For example, under this
"origin of the claim" test, the Supreme Court held that legal
expenses incurred to defeat claims arising from a marital
relationship were personal and nondeductible. Id. at 51. The
Court noted that it is irrelevant whether the taxpayer's income-
producing property would be affected by the outcome of the
divorce proceeding. See id. at 48.
Petitioner contends that the action that gave rise to the
sexual assault claim was his procuring of a hotel room for Ms.
Doe, Ms. Johnson, and Ms. Gavirati. Petitioner contends further
that his procurement of the hotel room for the ladies was in
connection with his business activity because he was complying
with a written standard operating procedure of GBC referred to
and described at trial as the "take the elevator home" policy
(elevator policy). Petitioner argues that the elevator policy
required any employee of GBC who noticed that a particular patron
at a GBC bar or restaurant was intoxicated should use all means
available to encourage that person to "take the elevator home"
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