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FYE 1993 Federal income tax return.5 Respondent disallowed the
deduction. We uphold respondent’s determination.
A corporate policy promulgated for the first time in
November 1991 required Holland America’s corporate officers, Mr.
and Mrs. Dobbe, to be present on the farm at all times to monitor
activities and deal with problems on the farm. That policy also
required Holland America to furnish lodging and meals to Mr. and
Mrs. Dobbe. Although the policy contained no provision making it
retroactive to 1989 or authorizing Holland America to reimburse
Mr. and Mrs. Dobbe for their grocery expenses, Holland America
relied on the policy to justify reimbursing Mr. and Mrs. Dobbe
for all their groceries purchased from January 1989 through
September 1993. Petitioners conceded that the groceries were
consumed by Mr. and Mrs. Dobbe, their children, and occasional
business clients and visitors.6
5Of the $34,246 reimbursed by Holland America for the cost
of groceries, only $6,417 was for groceries purchased from Oct.
1, 1992, through Sept. 30, 1993. Respondent argues that, even if
the corporate policy covers grocery reimbursement and supports a
deduction for some part of the reimbursement, Holland America is
not entitled to deduct on its FYE 1993 return the cost of
groceries purchased in prior fiscal years. We do not need to
address this issue in light of our holding.
6Holland America has not argued that sec. 274(n) applies,
and Mr. and Mrs. Dobbe have not argued that the reimbursement
they received for the cost of their groceries is excluded from
their income under sec. 132 as a “de minimis fringe” benefit.
See Boyd Gaming Corp. v. Commissioner, 177 F.3d 1096 (9th Cir.
1999), revg. T.C. Memo. 1997-445.
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