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taxpayer to substantiate by adequate records or by sufficient
evidence to corroborate the taxpayer’s own testimony: (a) The
amount of the expenditure, (b) the time and place of the
expenditure, (c) the business purpose of the expenditure, and (d)
the business relationship to the taxpayer of the person being
entertained.
For 1989, petitioner claims a business expense deduction of
$180 for the cost of meals billed through the Vassar Club.
Inconsistencies between the handwritten and printed receipts from
the Vassar Club, however, prevent us from finding that she has
adequately substantiated the business meal deductions claimed.
Nor has she adequately demonstrated the business purposes of
claimed travel expenses totaling $343 for separate trips in 1989
to Florida and to Washington, D.C.
Petitioner also claims deductions in 1989 for $3,000 in
legal and professional fees paid to the law firm of Saltzman &
Holloran and to the Prentice-Hall Financial Service relating to
the incorporation of Real Services. She also seeks to deduct the
filing fees charged for such incorporation. Assuming arguendo
that the claimed expenses of incorporating a corporation found to
be a sham for tax purposes have a business purpose, these
expenses would nevertheless not be deductible in 1989;19 these
19 Organizational expenses incurred and paid by a
corporation can be amortized at its election over a 60-month
(continued...)
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