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appears to include non-cash expenditures for fringe
benefits in the form of goods or services." In support of
this assertion, petitioners cite Wright v. Commissioner,
T.C. Memo. 1992-60, in which the Court permitted the
operator of a barter exchange to deduct under section
162(a) the value of "trade units", the medium of exchange
for transactions between members of the barter exchange,
that the taxpayer repaid to the exchange to correct
deficits created by other members. Petitioners also cite
Sullivan v. Commissioner, T.C. Memo. 1982-150, in which the
Court allowed a service station operator to deduct the cost
of beer that he offered to his customers free of charge
while their vehicles were being filled with gasoline or
serviced. Finally, petitioners cite Newark Morning Ledger
Co. v. United States, 507 U.S. 546 (1993), which
petitioners argue establishes "an important conceptual
landmark which, in this instance, would allow a basis for
the valuation and favorable tax treatment of legitimate
services provided by a business owner for the benefit of
his customers to engender good will, under the advertising
expenses expressly allowable under Reg. section 1.162-1."
Petitioners fail to perceive that section 162 limits
the expenses that a cash basis taxpayer can deduct to those
which are "paid" during the year. Petitioners also fail to
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