- 6 - "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, respondentPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011