56 T.C. 869">*870 The respondent determined an income tax deficiency of $ 588.63 for the taxable year 1965. Certain concessions having been made by each party, the only issue remaining1971 U.S. Tax Ct. LEXIS 93">*95 for decision relates to the deductibility of dues paid to a country club and amounts expended for entertainment at such club.

FINDINGS OF FACT

Some of the facts have been stipulated and are incorporated herein by this reference.

The petitioners, husband and wife, filed their joint Federal income tax return for the taxable year 1965 with the district director of internal revenue at Birmingham, Ala. At the time their petition herein was filed their legal residence was in Mobile, Ala. George W. Randall will hereinafter be referred to as the petitioner.

The petitioner is a certified public accountant and a member of the New York based accounting firm of Schutte & Williams. Such firm maintains an office in Mobile, Ala., where the petitioner is the managing partner. Under the partnership agreement, the petitioner is entitled to 30 percent of the annual net profits of the partnership from all sources. Separate books of account are maintained in the Mobile office and are consolidated in the New York office by means of monthly trial balances. During the period in question the partnership utilized a fiscal year ended July 31 for tax purposes.

Petitioner is a member of the Mobile Country1971 U.S. Tax Ct. LEXIS 93">*96 Club. During the taxable year ended July 31, 1965, he incurred charges at such club in the total amount of $ 1,927.53. Such charges were paid by the partnership with partnership funds.

Petitioner did not maintain a detailed diary of the charges incurred at such club. He did analyze the charge slips which accompanied and supported the monthly statement received from the club at about the time such statement was received. Inasmuch as the monthly statement for any particular month was received by petitioner at about the middle of the succeeding month, his analysis of the charge slips accompanying such statement took place about 2 to 6 weeks after the individual charges had been incurred. In the course of his analysis he distinguished each charge slip between what he considered to represent business entertainment and entertainment of a personal nature. He did not, however, indicate the name or names of the person or persons involved in the individual instances which he considered to represent business entertainment. For the taxable year ended July 31, 1965, the petitioner indicated that of the total charges incurred during 56 T.C. 869">*871 such year the amount of $ 1,310.70 represented1971 U.S. Tax Ct. LEXIS 93">*97 business entertainment and the amount of $ 616.83 represented personal entertainment.

Upon the basis of petitioner's analyses, the partnership charged petitioner's drawing account by the amount of charges indicated as personal. The charges indicated as business were recorded by the partnership as promotional or firm-relations expenses.

The Mobile Country Club is located about 4 or 5 blocks from the petitioner's residence. During the period before us the petitioner played golf at the club approximately two times a week. Because of his membership in the club he was not required to pay greens fees before playing. Other expenses incurred by him in playing golf, namely, the purchase of golf balls, the rental of golf carts, and the payment of caddie fees were considered by him to represent personal expenses and such was indicated by him with respect to the charge slips for such items.

Petitioner generally played golf on Saturdays and Sundays and occasionally played on weekdays. He usually did not have any prearranged tee-off time and the foursomes and fivesomes with which he played were generally not comprised of the same persons. Most of the time he played with other members of the1971 U.S. Tax Ct. LEXIS 93">*98 club and only upon about a half dozen occasions did he play with nonmembers. On such occasions he incurred the charges with respect to the nonmembers' greens fees and caddie fees and such charges were considered by him to represent business entertainment expenses.

Upon the completion of a golf game one of the persons involved would usually pay for the food and drinks of the others. Other persons with whom petitioner played paid for his food and drink following the completion of a game as often as he paid for theirs.

During the period before us petitioner also, upon occasion, played cards at the club. During the course of such games he would sometimes pay for a round of drinks for the persons involved and sometimes one of the other players would pay for such drinks.

Upon a number of occasions during the period before us the petitioner had meetings and discussions with clients at the club.

Of the $ 1,310.70 in charges which petitioner considered as business entertainment expenses, $ 300 represented the dues with respect to his membership at the Mobile Country Club. The amount remaining largely represented charges incurred for the purchase of food and beverages. Such charges for1971 U.S. Tax Ct. LEXIS 93">*99 food and beverages were incurred in large part during the course of, or following the completion of, a golf game.

During the period before us the petitioner's wife and children were also permitted to utilize the facilities at the Mobile Country Club 56 T.C. 869">*872 without incurring charges. During such period his wife used such facilities infrequently. His son, aged 15, played golf frequently and his daughter, aged 8, occasionally used the club's swimming pool. Any charges incurred by his family for the purchase of food and beverages or for the rental of golf carts, and the like, were considered by petitioner as personal expenses and such was indicated by him with respect to the charge slips for such items. During the period before us the petitioner and his family occasionally dined together at the club. The charges incurred on such occasions were considered by him as personal expenses and such was indicated by him with respect to the charge slips for such items.

On their return for the taxable year 1965 the petitioners reported the amount of $ 39,964.93 as the petitioner's distributive share of income from the partnership of Schutte & Williams. In the notice of deficiency the respondent1971 U.S. Tax Ct. LEXIS 93">*100 determined that petitioner's distributive share from such partnership was in the amount of $ 41,366.43. Such determination was based, in part, upon the disallowance of deductions claimed by the partnership which represented food and bar expenses incurred by petitioner at the Mobile Country Club in the amount of $ 945 and the dues paid to such club in the amount of $ 300. The reason stated by respondent in disallowing such deductions was that it had not been established that such amounts constituted ordinary and necessary business expenses or that they were expended for the purpose designated.

OPINION

Section 162 of the Internal Revenue Code of 1954¹ permits a deduction for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business. Section 262 of the Code ² precludes deductions for expenses which are personal in nature. Here, the disputed items consist largely of expenditures made for the purchase of food and beverages from the Mobile Country Club and for petitioner's membership dues in such club. While expenditures of this type may qualify as ordinary and necessary business expenses within the meaning of section 162, 1971 U.S. Tax Ct. LEXIS 93">*101 it is well settled that to so qualify such expenditures must be shown to have been incurred primarily to benefit the business carried on by the taxpayer. See Robert Lee Henry, 36 T.C. 879">36 T.C. 879, and cases cited therein. The burden of proof 56 T.C. 869">*873 that such expenditures were so incurred is upon the petitioner. Welch v. Helvering, 290 U.S. 111">290 U.S. 111.

Section 274 of the Code ³ specifically deals with the deductibility of expenses for entertainment and for facilities used in connection therewith. In John L. Ashby, 50 T.C. 409">50 T.C. 409,1971 U.S. Tax Ct. LEXIS 93">*102 we stated in respect to section 274:

In general, section 274 provides that to be deductible an item with respect to entertainment must be shown to be directly related to or, under specified circumstances, associated with the active conduct of the taxpayer's trade or business, and that an item with respect to a facility used in connection with entertainment is deductible only if it is shown that the facility was used primarily for the furtherance of the taxpayer's trade or business and that the item was directly related to the active conduct of the business. Section 274 also lays down strict requirements with respect to substantiation as a prerequisite to 56 T.C. 869">*874 deductibility. It provides that an item is not deductible unless the taxpayer substantiates by adequate records, or by sufficient evidence corroborating his own statement, the amount of the expense or other item, the time and place of the entertainment or use of the facility, the business purpose of the expense or item, and the business relationship to the taxpayer of the persons entertained or who used the facility. The congressional committee reports show that the substantiation requirements of section 274 contemplate1971 U.S. Tax Ct. LEXIS 93">*103 more detailed record-keeping than was common prior to the time of the enactment of section 274, and that it was the intention of Congress that no deduction should be allowed solely on the basis of a taxpayer's unsupported self-serving testimony. * * *

And, as we subsequently pointed out in William F. Sanford, 50 T.C. 823">50 T.C. 823, affd. (C.A. 2) 412 F.2d 201">412 F.2d 201, the requirements of section 274 are in addition to those imposed by section 162, and petitioner still has the burden of proving initially that the expenses are ordinary and necessary expenses proximately related to his trade or business.

1971 U.S. Tax Ct. LEXIS 93">*104 Here, the petitioner urges that because the ethics of his profession precluded advertising for clients, it was necessary for him to maintain membership at the club whereby clients could be obtained through the social contacts there developed. At the trial he submitted a list of 26 persons with whom he associated at the club during the period before us and with respect to whom the disputed expenditures were incurred. ⁴ Of such 26 persons, 24 were also members of the club; 16 were employed by or otherwise associated with clients of petitioner's firm; 2 were either employed by or associated with prospective clients of petitioner's firm; and 8 were other professional persons such as lawyers, bankers, and insurance representatives. It was indicated that 4 clients had been obtained through his country club associations. Upon the basis of the foregoing the petitioner contends that the disputed expenditures constituted ordinary and necessary business expenses within the meaning of section 162.

1971 U.S. Tax Ct. LEXIS 93">*105 We cannot agree. We recognize that certified public accountants, like other professional groups such as doctors and lawyers, are precluded from advertising for clients and that, therefore, maintaining memberships in various socially oriented organizations and participating in the activities of such organizations may be helpful in securing clients through the contacts thus developed. This does not, however, of itself suffice to establish that the expenses incurred in connection with such activities are business rather than personal. Nor does the evidence proffered by petitioner serve to cure such infirmity. It is also to be recognized that people, professional and otherwise, often form personal friendships with those with whom they come in contact through their occupations. Thus, the fact that most of the 56 T.C. 869">*875 persons to whom petitioner's expenditures were directed either were in some manner associated with clients and potential clients of petitioner's firm or were members of other professional groups proves little, if anything at all, as to why the expenditures were incurred. ⁵

1971 U.S. Tax Ct. LEXIS 93">*106 The petitioner did not testify that the golf games and card games, the activities during which most of the expenses for food and beverages were incurred, constituted occasions during which business was transacted or discussed. Nor does the evidence purport to show which person or persons were entertained upon any particular occasion. Indeed, other evidence of record suggests that the expenditures made on such occasions, or part of them, may have been primarily motivated by the general feelings of friendship and camaraderie to be found among the members of any social club and not by the intent to secure a present or future business advantage. Such evidence is to the effect that most of the persons involved in the disputed entertainment were also members of the Mobile Country Club, that petitioner's golfing activities and the foursomes and fivesomes there involved were generally not prearranged, and that other golfing and card playing participants also purchased food and drink for the parties involved.

In view of the above it is our conclusion that petitioner has failed to prove that the disputed expenditures constituted ordinary and necessary business expenses within the meaning1971 U.S. Tax Ct. LEXIS 93">*107 of section 162. Having so failed, it is axiomatic that such expenditures, including those for food, beverages and the like, as well as those for membership dues, cannot be regarded as satisfying the provisions of section 274(a). As to the petitioner's contention that the expenditures in question, or most of them, come within section 274(e)(1), namely, the business meal exception to the provisions of section 274(a), it is our opinion that the circumstances normally attending the "19th hole" and the "gin rummy table" cannot be regarded as the type of circumstances generally considered as conducive to business discussion within the meaning of such exception.

Finally, even if petitioner were regarded as having satisfied the aforementioned prerequisites for deducting the expenditures in question, 56 T.C. 869">*876 it is clear that he has not satisfied the substantiation requirements of section 274(d), particularly those directed to the business purpose of such expenditures.

Decision will be entered under Rule 50.