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The Bank of Minora was a small Iranian bank that would
exchange U.S. dollars for Iranian rials. Petitioner and CTC
employees used the Bank of Minora to make transfers to Diesel
Power. In 1973 and 1974 petitioner deducted as "commission
expense transfers" to the Bank of Minora the amounts of $23,686
and $30,000. The conversion of currency from U.S. to Iranian was
an ordinary and necessary business expense of petitioner.
Petitioner's cash disbursements journal for 1973 lists a
payment of $35,000 on July 7, 1973, to an illegible payee. This
amount was deducted as a commission expense. It has not been
proven to be an ordinary and necessary business expense of
petitioner.
There is no evidence in the record to support unidentified
commission expenses in the amounts of $170 and $16,000 for the
years 1973 and 1975, respectively, that were claimed by
petitioner on his 1973 and 1975 income tax returns.
Petitioner paid Hossein Zanganeh $80,000 in 1973 and $75,000
in 1974 for assisting him in selling Lockheed aircraft in Iran.
The $80,000 payment is not at issue. Petitioner deducted the
1974 payment as a commission expense. However, Diesel Power
reimbursed petitioner for this payment.
Sadek Massey was an employee of Diesel Power. Petitioner
paid Sadek Massey $2,000 in 1974 and deducted that amount on his
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