James E. and Kathy Walker - Page 2

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               Respondent determined deficiencies in petitioners' 1990 and            
          1991 Federal income taxes in the amounts of $2,896 and $1,843,              
          respectively.                                                               
          The sole issue for decision is whether petitioners are                      
          entitled to claim deductions for political contributions as                 
          ordinary and necessary business expenses under section 162.                 
               Some of the facts have been stipulated and are so found.               
          The stipulations of fact and attached exhibits are incorporated             
          herein by this reference.  Petitioners resided in McLoud,                   
          Oklahoma, on the date the petition was filed in this case.                  
          Hereinafter, references to petitioner in the singular are to                
          James Walker.                                                               
               Petitioner is an attorney who specializes in lobbying                  
          activities.  During 1990 and 1991, he represented business                  
          clients involved in banking, savings and loans, dentistry,                  
          insurance, and the cable and trucking industries.  During 1990              
          and 1991, petitioner traveled to Washington, D.C. to lobby on               
          behalf of his cable, trucking and savings and loan clients, and             
          regularly attended Oklahoma legislature meetings as a lobbyist.             
          Petitioner was reimbursed by his law firm, a professional                   
          corporation, for business expenses including travel, meals, and             
          entertainment which petitioner incurred in the performance of his           
          lobbyist activities.  The law firm, in turn, was reimbursed for             
          these expenses by the clients the firm represented.                         






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