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During June or July 1989, a document dated March 1986 appeared.
The document contained the advice that C&L rendered 7 months
after the date on the document. We are unpersuaded that the
similarities were coincidental. Additionally, the payment term
of not later than 1 year after MANV filed its 1986 tax returns
would have required a payment no later than June 7, 1989.
MDT/MANV paid MSI/MTNV with a check dated July 3, 1989. We are
persuaded that the documents were backdated. Although backdated
documents may imply fraudulent intent, it does not necessarily
mandate a denial of petitioners' deduction. Bradford v.
Commissioner, 796 F.2d 303, 307 (9th Cir. 1986), affg. T.C. Memo.
1984-601; Baldwin v. Commissioner, T.C. Memo. 1993-433.
Petitioners, however, have the burden of proving that the
payments were for marketing fees. Because of the lack of
credible evidence to support petitioners' position and the
unreliability of the backdated documents, we conclude that
petitioners have not met their burden of proof. Accordingly, we
sustain respondent's determination with respect to this issue.
VI. New Jersey and California Expansion Expenses
Petitioners deducted expenses incurred with the development
of two new castles in California and New Jersey. Petitioners
argue that these amounts were expended for their own benefit and
account in the expansion of their existing business to new
locations.
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