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entertainment in 2003. See sec. 274(n). To substantiate his
deduction, petitioner offered receipts from various convenience
stores, video rental stores, entertainment venues, and
restaurants and provided his electricity bills for 2003.
Petitioner also testified that he entertained about 100 potential
customers or employees during 2003, and he occasionally bought
lunches, sodas, and snacks for other employees in order to meet
The Men’s Warehouse’s corporate goal of establishing a “high-
quality work environment”.
The location of the entertainment activities was frequently
apparent from the receipts that petitioner provided, and
petitioner testified that he entertained potential customers and
employees in his home and provided sodas and snacks for employees
at The Men’s Warehouse store. However, petitioner provided only
vague testimony that he incurred expenses entertaining potential
customers and employees, without providing specific names, dates,
corroborating evidence that the expenditures were so spent, or
evidence that he was not reimbursed for these expenses. He also
provided no specific evidence of what the business purposes of
the entertainment activities were other than to keep the other
employees happy. We are not convinced that petitioner has
satisfied the strict substantiation requirements of section
274(d) or that these expenditures were ordinary and necessary
expenses as required by section 162(a).
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