Robert J. Geary - Page 9




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               Petitioner's signature gatherers were employed to gather                
          signatures with the express purpose of putting the puppet issue              
          on the November 1993 ballot.  These signature gatherers were paid            
          by petitioner's Committee and certainly made statements                      
          supporting the inclusion of the issue on the November 1993 ballot            
          while gathering signatures from the public in San Francisco.                 
               This Court has consistently held that expenses incurred to              
          influence the public with respect to legislative matters,                    
          decisions, or referendums are nondeductible.  See Cloud v.                   
          Commissioner, 97 T.C. 613 (1991); Southern Pac. Transp. Co. v.               
          Commissioner, 90 T.C. 771, 780-782 (1988).  Taken as a whole,                
          petitioner's actions show a clear intent to influence the general            
          public.  Petitioner formed his Committee, funded it with his own             
          money, sent out signature gatherers to qualify the issue for the             
          November 1993 ballot, and then secured voting slate approval of              
          Proposition BB from local political organizations.  Petitioner is            
          now attempting to break out certain expenses and narrowly isolate            
          those expenses so they do not fall under the section 162(e)(2)(B)            
          exclusion.  We are not persuaded by his argument in that respect.            
          Petitioner's claimed expenses are disallowed by section                      
          162(e)(2)(B).                                                                
               We therefore hold that petitioner is not entitled to claim              
          expenses incurred in putting the Officer O'Smarty issue on the               
          November 1993 ballot as section 162 deductions on his 1993                   
          Federal income tax return.                                                   




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