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have records. Thus, there is no need to estimate amounts under
Cohan.
We conclude that AIM may deduct $442 in 1994, $40 in 1995,
and $243 in 1996 for reimbursing petitioner for high school
student labor expenses. Those amounts are not constructive
dividends to petitioner.
E. Golf Expenses
AIM reimbursed petitioner for one-half of the expenses that
he incurred for golf in 1995 and 1996. Petitioners contend that
AIM properly deducted AIM’s reimbursement to petitioner of golf
expenses of $236 for 1995 and $369 for 1996. We disagree.
Expenses of recreation and entertainment generally are
nondeductible unless the taxpayer substantiates by adequate
records, or by sufficient evidence corroborating his or her own
testimony: (1) The amount of the expense; (2) the time and place
of the expense; (3) the business purpose of the expense; and (4)
the business relationship to the taxpayer of the persons
entertained. Sec. 274(d); sec. 1.274-5T(c)(3), Temporary Income
Tax Regs., 50 Fed. Reg. 46020 (Nov. 6, 1985). Petitioners
offered no evidence showing the place, the persons entertained,
the business purpose, or the business relationship to AIM of the
persons entertained. Petitioners had no receipts. Thus,
petitioners have not met the requirements of section 274(d).
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