- 224 -
to deductible items versus nondeductible items. Consequently,
petitioner has failed to meet his burden of proof as to the
amount of such fees that is deductible for Federal income tax
purposes. Merians v. Commissioner, 60 T.C. 187 (1973). In
addition to these fees, we note that other expenses for 1976 and
1977 also relate to the same arbitration. When Clark Equipment
Company canceled its distributorship with Diesel Power, Diesel
Power was left with Clark Equipment inventory on hand that it
could not sell. The distributorship agreement provided for
arbitration to resolve such disputes. Diesel Power was
represented in this matter by George, Greek. The other fees paid
to Walder, Wyss, & Maier, Coudert Freres, and A. Sarisin & Cie
represented deposits and arbitrator fees that Diesel Power was
required to pay. Since the dispute concerned a distributorship
agreement and inventory of Diesel Power rather than petitioner,
the legal fees and other arbitration expenses are those of Diesel
Power and not those of petitioner.
Petitioner claimed a deduction in the amount of $9,312.49 on
his 1976 income tax return for payment to Larry Castoe for
professional services. Because petitioner has not shown that Mr.
Castoe's fee was petitioner's ordinary and necessary business
expense, this deduction is disallowed.
Page: Previous 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 NextLast modified: May 25, 2011