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concedes that the payments should have been included in income
during 1989 and 1990, respectively.
Petitioner deposited the $60,000 and $100,000 into its
Amarillo account in 1989 and 1990, respectively, withdrew cash in
the amounts deposited, and gave the cash to Mr. Val Clawson.
Mr. Clawson is an employee of Dejarnett Sales, which is a food
broker for Western. Mr. Clawson was told to distribute this cash
to the member stores at the food shows.
Western does not provide any currency to be passed out at
the food show on its behalf. However, using the money given to
him by petitioner, Mr. Clawson offered allowances on Western
products purchased at the show. For example, if a Western
product had a show allowance of a dollar a case and the member
store bought 100 cases, then he would give the store $100 cash.
He also offered payments by check; the decision on whether to
accept currency or a check was made by the member store. Based
on the tear strips, the amount of cash given to Mr. Clawson could
be reconciled back to the amount of cash that he returned to
petitioner at the end of the show. Thus, petitioner knew exactly
what was done with the money, how many cases were sold, and the
cash allowances distributed at the food show.
According to petitioner's bookkeeping entries, Mr. Clawson
distributed $35,616 and $82,958 to representatives of the member
stores at the 1989 and 1990 food shows, respectively. Although
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