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with office space and paid him a monthly fee; petitioner also
paid for various office supplies, stock exchange fees, and
financial publications and services. Petitioner claimed
professional fee deductions of $9,312.49 in 1976 for payments
made on behalf of Mr. Castoe. Petitioner also claimed consulting
fee deductions in the amounts of $18,266.10 in 1977, $14,377.13
in 1978, and $12,445.39 in 1979 for fees paid to or on behalf of
Mr. Castoe. Petitioner did not have an extensive investment
portfolio during the years at issue. Other than through earnings
and capital gains on his investments, there is no evidence
showing how petitioner was to personally profit from Mr. Castoe's
activities. Therefore, the claimed deductions for consulting
fees and professional fees were not ordinary and necessary
business expenses of petitioner.
In 1978 petitioner and Harris Corporation reached an
agreement whereby he would provide aid and assistance to Harris
Corporation in its areas of foreign operations for a period of 10
years for which he would be compensated $300,000 per year. The
agreement provided that all matters with respect to Harris'
operations would remain confidential; petitioner had no authority
to bind or obligate Harris without specific written
authorization. Petitioner engaged his brother, I.J. Zand, to
assist him in providing services to Harris Corporation and agreed
to split the fees to be paid by Harris Corporation with his
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