Daniel Francis Kelly, Jr. - Page 10




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          and procure for the intoxicated customer a room at a GBC hotel at           
          the reduced employee rate.                                                  
               Respondent argues that the action that gave rise to the                
          sexual assault claim was not the procurement of the hotel room              
          but, rather, was petitioner's second visit to the hotel room, at            
          which time he and Ms. Doe were alone in the room.6  This second             
          visit, respondent contends, did not arise because of any business           
          activity of petitioner but, rather, was motivated strictly by               
          personal desires.  Respondent argues additionally that, even                
          should the Court determine that the initial procurement of the              
          room was the action that gave rise to the sexual assault claim,             
          petitioner did not procure the room pursuant to GBC's elevator              
          policy but, rather, obtained the room in the hopes of engaging in           
          a romantic interlude with Ms. Doe or one of her companions.                 
               In support of his position, petitioner relies primarily on             
          Clark v. Commissioner, 30 T.C. 1330 (1958), in which this Court             
          held that the taxpayer's expenses incurred in the defense of a              
          criminal sexual assault charge, and amounts paid in settlement of           
          a civil claim for damages arising from an alleged sexual assault,           
          were deductible as ordinary and necessary business expenses.  The           
          facts of Clark v. Commissioner, supra, are distinguishable from             
          the facts of this case.  Petitioner's reliance in Clark is                  
          misplaced.                                                                  


          6                                                                           
               Petitioner admits that he did make a second visit to the               
          hotel room, at which time he and Ms. Doe were alone.  The details           
          of this second visit are discussed hereafter.                               

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