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"goodwill" advertising. The taxpayer stated that
he did not always charge when patients called in
for a consultations [sic] on the phone or when
patients called him to have prescriptions
refilled. The taxpayer has stated that the
normal charge for this type of service is $15 to
$20. The taxpayer had kept a log of calls that
he received and he deducted for these calls as
goodwill advertising.
LAW:Internal [sic] Revenue Code Section 162
states that there shall be allowed as a deduction
all the ordinary and necessary expenses paid or
incurred during the taxable year in carrying on
any trade or business.
In Von [sic] Iderstine Co., 16 TCM 790, Dec.
22,578(M) the court stated that no evidence to
show any publicity for the petitioner resulted
from making payment or that any goodwill was
engendered.
Taxpayer's Position:The [sic] taxpayer's position
is that the services that he provided has a
value. The taxpayer states that cash does not
have to change hands if the services provided has
[sic] a clear monetary value. The taxpayer,
therefore, thinks it is reasonable to consider
the services having a cash value and being
deductible as an advertising expense.
Conclusion:Based [sic] upon the facts and law
stated above, the taxpayer is not entitled to the
claimed deduction. The taxpayer is on the cash
method of accounting. No income has ever been
reported for the claimed deduction. In addition,
the taxpayer has not proved that any goodwill was
engendered. Items are not deductible under IRC
162.
Approximately 6 months later, respondent mailed to
petitioners the notice of deficiency that is at issue in
this proceeding. In the notice of deficiency, respondent
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Last modified: May 25, 2011