- 2 -
Held: P’s claimed deductions are limited by sec.
274(n)(1), I.R.C., as determined by R.
Held, further: In incurring the expenses at issue
P neither provided goods and services to the general
public nor received adequate and full consideration for
the goods and services provided. Therefore, P’s
expenses are not excluded from the operation of sec.
274(n)(1) by sec. 274(n)(2) or (e)(7) or (8), I.R.C.
Paul J. Cox, for petitioners.
Andrew M. Winkler, for respondent.
OPINION
LARO, Judge: This case is before the Court fully
stipulated. See Rule 122.1 Respondent determined deficiencies
in petitioners’ 1994 and 1995 Federal income tax of $51,872 and
$20,658, respectively. The sole issue we must decide2 is whether
petitioners’ claimed deductions for expenses for parties and
other entertainment are limited by section 274(n)(1). We hold
they are. The stipulation of facts and the attached exhibits are
incorporated herein. The stipulated facts are hereby found.
Background
Petitioners are corporations which file a consolidated
1 Rule references are to the Tax Court Rules of Practice and
Procedure. Unless otherwise indicated, section references are to
the Internal Revenue Code in effect for the years in issue.
2 The parties had settled all other outstanding issues
before the case was submitted.
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