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4. Travel, Entertainment, and Meals
Petitioners deducted travel expenses of $61,601 in 1990,
$100,601 in 1991, and $18,638 in 1993. Petitioners also deducted
entertainment and meal expenses of $12,636 in 1990, $25,693 in
1991, and $20,294 in 1993. Petitioner generally testified that
he traveled to Europe to meet with various representatives of
banks and trusts to secure funding for the Texas high speed train
project. He did not provide any other detail regarding his
travel, entertainment, and meal expenses. Petitioners’ primary
argument is that Price Waterhouse, their tax preparer, would not
have listed the deductions unless the deductions were proper,
and, therefore, they are entitled to deduct petitioner’s travel,
entertainment, and meal expenses.
Petitioner did not produce documents to support the claimed
deductions for travel, entertainment, and meals. Petitioner
provided several theories as to why the documents were
unavailable: First, petitioner forwarded the documents to
support his deductions to Price Waterhouse. According to
petitioner, Price Waterhouse, as part of its document retention
policy, destroyed the documents.10 Second, petitioner’s
secretary died in the early 1990's, and, therefore, petitioner
10 At trial, Michael A. Halpert, a revenue agent for the
Internal Revenue Service, testified that Price Waterhouse
provided him with credit card statements and a spreadsheet of
travel expenses for tax year 1991.
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