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for a gift, i.e., the cost of the gift to the taxpayer; (2) the
time of each such expenditure, i.e., the date of the gift;
(3) the description of each such expenditure, i.e., a description
of the gift; (4) the business purpose of each such expenditure,
i.e., the business reason for the gift or nature of the business
benefit derived or expected to be derived as a result of the
gift; and (5) the business relationship of each such expenditure,
i.e., the occupation or other information relating to the recipi-
ent of the gift, including name, title, or other designation,
sufficient to establish business relationship to the taxpayer.
Sec. 1.274-5T(b)(5), Temporary Income Tax Regs., 50 Fed. Reg.
46016 (Nov. 6, 1985).
Petitioner testified that he did not use the $1,600
McKendree driving allowance to pay for vehicle expenses, as
required by McKendree’s reimbursement policy. Instead, according
to petitioner’s testimony, he used that driving allowance to pay
for the claimed gifts totaling $1,600 to customers and prospec-
tive customers of McKendree. Petitioner testified:
I would basically purchase very inexpensive gifts
generally under $20, give it either to potential cli-
ents or give it to present clients just as a way of
greasing the skids. So all the gifts I gave I kept
track of. I know what days I gave it on.
Sometimes I don’t have exactly who I gave it to,
but other times I did. I wasn’t exact about writing
down the name of the person. All that was done in that
year. It was fully expensed, and I basically kept
track of that.
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Last modified: November 10, 2007