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to regulations, this rule applies to “membership in any club
organized for business, pleasure, recreation, or other social
purpose”, which definition includes, but is not limited to,
“country clubs, golf and athletic clubs, airline clubs, hotel
clubs, and clubs operated to provide meals under circumstances
generally considered to be conducive to business discussion.”
Sec. 1.274-2(a)(2)(iii)(a), Income Tax Regs. Membership dues and
related charges paid to the Arizona Club, Gardiner’s Resort, and
Gainey Ranch are therefore nondeductible.
With respect to other amounts paid to clubs, legislative
history accompanying passage of section 274(a)(3) in 1993, after
stressing the blanket disallowance for club dues, states:
“Specific business expenses (e.g., meals) incurred at a club are
deductible only to the extent they otherwise satisfy the
standards for deductibility.” H. Conf. Rept. 103-213, at 583
(1993), 1993-3 C.B. 393, 461. Here, the record fails to show
that the payments made to the Arizona Club, Gardiner’s Resort,
and Gainey Ranch do so. Petitioners claimed expenses under the
characterization of training, meetings, and/or conventions but
have offered insufficient evidence to connect any of the
expenditures to a particular business outing or function.
Generalized testimony and unsupported estimates regarding
business use constrain us to rely on the invoices themselves.
These invoices indicate meal and entertainment expenditures
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