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multiple possibilities that exist, including a category mandating
strict substantiation under section 274, the Court is in no
position to guess.
As regards Rolex watches, Mr. Deihl testified concerning how
these items were given away as prizes at conventions to top-
performing distributors. The Court is satisfied that petitioners
did in fact give away Rolexes as compensatory awards potentially
deductible under section 162. The documentary record includes
two charges specifically identified as for Rolex watches, made at
Landmark Jewelers in May and September of 1997. However, only as
to the September purchase does the record offer any evidence that
could tend to corroborate that the particular watch was employed
as a prize at a convention in the manner suggested. Based on the
agenda for the KareMor convention held in the Fall of 1997, the
Court would be willing to find that a $13,400 business expense
for a Rolex watch had been substantiated and would be allowable
were it not for the consideration discussed in the following
paragraph. Otherwise no sufficient evidence was presented, and
the possibility of personal use was also addressed only by
uncorroborated testimony that no Rolex watches were bought for
family members.
11(...continued)
organization. But as I sit here at this point in time I don’t
remember how this was done or whether it was done for Women of
KareMor or something of that nature.” Such testimony only
underscores the shortcomings of the record in these cases.
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