Joseph A. and Sari F. Deihl - Page 51

                                       - 51 -                                         
          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.                  




Page:  Previous  41  42  43  44  45  46  47  48  49  50  51  52  53  54  55  56  57  58  59  60  Next

Last modified: May 25, 2011