- 22 - Generally, meal expenditures are treated as personal expenses and are not deductible for Federal income tax purposes. See sec. 262; Rhoads v. Commissioner, T.C. Memo. 1987-335; Fenstermaker v. Commissioner, T.C. Memo. 1978-210; sec. 1.262- 1(a) and (b)(5), Income Tax Regs. Only those meal expenditures that satisfy the requirements for deductibility under section 162(a) may be deducted as business expenses. Holland America has failed to prove that its reimbursement of Mr. and Mrs. Dobbe’s grocery expenses, covering a 5-year period, was anything more than the payment of a personal expense of its shareholders-officers. Although Holland America contended that the reimbursement met the requirements of section 162(a), it did not offer any credible evidence to show that the reimbursement was ordinary or necessary under the circumstances involved here. Mr. and Mrs. Dobbe lived on the farm. They bought groceries and cooked their meals in their own home. Although Mr. and Mrs. Dobbe were involved in the day-to-day operation of the farm and may have eaten meals occasionally while addressing issues on the farm, they did so for their own convenience. The mere possibility that an emergency may arise on the farm does not convert a personal expense into a business expense. See Rhoads v. Commissioner, supra. Holland America had other employees in addition to Mr. and Mrs. Dobbe, yet the corporate policy was limited solely to Mr.Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Next
Last modified: May 25, 2011