- 23 -
and Mrs. Dobbe. Holland America did not demonstrate that Mr. and
Mrs. Dobbe were the only employees available for or capable of
dealing with farm emergencies or that its reimbursement of Mr.
and Mrs. Dobbe’s grocery expenses was necessary to ensure that
competent employees would be available to deal with such
emergencies during customary mealtimes.
Although business customers occasionally stayed overnight at
the farm and some of the groceries presumably were consumed by
them,7 Holland America has not argued that the amount paid as
reimbursement must be apportioned to reflect business and
personal use. Rather, Holland America seeks to deduct the cost
of all groceries consumed by Mr. and Mrs. Dobbe, their family,
and visitors, regardless of whether the groceries were consumed
in connection with a legitimate business activity. Holland
America concededly did not keep any records that would permit us
to isolate those costs incurred for business, if any. Without a
more definitive record, any allowance would amount to unguided
largess. See Williams v. United States, 245 F.2d 559, 560 (5th
Cir. 1957); Reynolds v. Commissioner, T.C. Memo. 2000-20;
Williams v. Commissioner, T.C. Memo. 1998-93. Accordingly, we
7Neither Holland America nor Mr. and Mrs. Dobbe maintained
any records of the people who visited the Dobbe residence and/or
consumed meals there allegedly for business purposes. See sec.
274(d).
Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 NextLast modified: May 25, 2011