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offered little evidence that the landscaping improvements were
appropriate or necessary to the maintenance and development of
Holland America’s business. See Commissioner v. Heininger, 320
U.S. at 471. Drive-by customers accounted for a very small
percentage of Holland America’s sales, and there is no evidence
in the record demonstrating that sales to Holland America’s
regular customers increased in any material way as a result of
the improvements. At trial, Martin Meskers, a flower grower from
Oregon who has purchased bulbs from Holland America since its
incorporation and spends about $500,000 per year at Holland
America, testified that the new landscaping was nice and gave a
good first impression. Mr. Meskers admitted, however, that he
still would spend the same amount per year even if the
landscaping was not as nice because Holland America carries the
product he needs.
We hold that petitioners have not proven that the
landscaping expenses were ordinary and necessary business
expenses deductible by Holland America under section 162.
C. Groceries (“Supplies” Expense)
In November 1993, Holland America reimbursed Mr. and Mrs.
Dobbe in the amount of $34,246 for all groceries purchased for
every meal prepared or eaten by the Dobbe family at their home
from January 1989 through September 1993. Holland America
deducted the entire reimbursement as a “supplies” expense on its
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