Dutch Treat

Salesmen and executives who have traveled the expense account road to the good life were tripped up last week. A U.S. tax-court decision held that a businessman may deduct the price of his own meal, while entertaining, only to the extent that it is higher than what he usually pays. Said the court: "When a taxpayer in the course of supplying food or entertainment . . . includes an amount attributable to himself or his family . . . the costs . . . are ordinarily and by their very nature personal expenditures forbidden deduction . . . Nondeductibility of personal expenses may be overcome only by clear and detailed evidence . . ."

In a decision involving a physician who runs an industrial clinic, the court also disallowed deductions for gifts to nurses, hospitals and parking lot attendants, as well as for hunting trips, lunches and the costs of publishing an article on industrial medicine. Towards running a cabin cruiser and entertainment on it for physicians and friends, the court allowed only 25%. . . .

The Internal Revenue Service took a second look at nudist societies, whose dues have hitherto been taxexempt. It decided that they belong in the category of "social, athletic or sporting" clubs. As such, 20% of their dues must be paid in taxes.

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