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between it and Ohanesian was defined solely by the written
agreements, that Margaret was petitioner's sole shareholder, that
petitioner was independent, and that any alleged oral agreements
did not exist or were unenforceable. Agreeing with petitioner's
position in that case, the jury found in effect that an agency
relationship did not exist. Therefore, based on the facts and
related legal precedent, we conclude that respondent reasonably
argued that the expenses deducted by petitioner on account of the
automobiles and other items were not incurred as agent for
Ohanesian and the related entities.
Petitioner alternatively asserts that, even if it were not
an agent, respondent unreasonably refused to concede the
deductibility of the expenses under section 162 because the State
court jury found MMC to be contractually liable to pay the
expenses of the Ohanesians. Based upon this fallacious
assumption as to what the jury found (see infra), petitioner
argues that, even though petitioner paid what amounted to
personal expenses of the Ohanesians, the payments were ordinary
and necessary business expenses of petitioner as a result of the
oral agreement. However, the jury verdict makes no mention of
any liability to pay expenses of Ohanesian and the related
entities, and neither do the written agreements on which that
verdict was based. In fact, the Gehans themselves stated in an
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