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located at 1066 South Pekin Road. Premiums attributable to Mr.
and Mrs. Dobbe’s residence ($350) were included in the amount
deducted.
Deduction for Golf Clubs
During FYE 1993, Holland America purchased a set of golf
clubs for Rinus Heemskerk, a flower bulb salesman/broker for
Holland America who worked in The Netherlands. As a commissioned
broker, Mr. Heemskerk received sales commissions from both
Holland America, as purchaser, and from the seller. The sales
commissions were based on sale prices and were included in the
purchase prices Holland America paid for the bulbs.
Holland America did not issue a Form W-2, Wage and Tax
Statement, or a Form 1099, Miscellaneous Income, to Mr. Heemskerk
for the golf clubs. Holland America purchased the golf clubs for
Mr. Heemskerk as an incentive for future performance and in
appreciation for his past service to the company. Holland
America deducted the entire cost of the golf clubs, $1,455, as an
“Employee Relations” expense or “Customer Ref” expense.
OPINION
I. Was Mr. and Mrs. Dobbe’s Residence Leased to Holland America
During and Before FYE 1993?
In support of their position that Holland America was
entitled to deduct the grocery expense reimbursement and the
various expenses paid with respect to the Dobbe residence,
petitioners argue that the Dobbe residence was leased to Holland
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