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Great deducted $166,162 and $105,905 for its FYE July 31,
1983 and 1984, for film and video fees. These deductions were
allegedly for inspirational films that had been made by
individuals, such as Vince Lombardi. Great's deduction was
based on an alleged agreement, under which Great was to pay 3
percent of sales for the rental of the films. Because Great
was on the accrual method of accounting, the amounts were
projected, and deductions were taken on Great's tax returns.
Some of the films were otherwise available and were in the
public domain. Rights to the films were allegedly in a company
in Barbados. Great did not make any payments with regard to
the alleged film rentals. Respondent disallowed these amounts
because they were not incurred. Great, for its years ended
July 31, 1983 and 1984, deducted $330,536 and $529,321 for
seminars, and respondent disallowed $10,907 and $17,468,
respectively. Respondent's agent was not provided with any
documentation for the seminar deductions for the years at
issue. The agent concluded that 96.7 percent was allowable in
each year based on prior years' audit experience where
documentation was provided and audited. Petitioners did not
provide documentation at trial that would show that
respondent's determination was in error.
Great, for its FYE July 31, 1983, deducted $170,147 for
travel, meals, and entertainment. Respondent reviewed
$65,298.85 of the claimed amount and disallowed $19,382.46, or
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