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deduction of the value of services rendered by a cash basis
taxpayer. In that case, the Supreme Court held that a
newspaper publisher had proven that a list of "paid
subscribers" constituted an intangible asset with an
ascertainable value and a limited useful life, the duration
of which could be ascertained with reasonable accuracy,
and, thus, qualified for the depreciation allowance under
section 167. The case does not support petitioner's
assertion that the value of professional services rendered
constitutes a deductible advertisement expense.
In light of the forgoing, we hold that the value of
the telephone services rendered by petitioner was not an
expense that was “paid or incurred” during any of the years
in issue and is not deductible under section 162.
Therefore, we sustain respondent's determination that
petitioners are not allowed a deduction for the value of
the time Dr. Remy spent giving free telephone services to
his patients.
Validity of Notice of Deficiency
Petitioners also argue that the Court should disallow
the subject tax deficiencies on the ground that the revenue
agent's report, upon which the notice of deficiency is
based, contains "gross errors of fact". In support of
this argument, petitioners cite Bruce & Human Drug Co.
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