19
Thus, by making the contributions, WSA obtained the assurance
that its bingo license would not be revoked or suspended, and the
assurance was quid pro quo for the contributions. See South End
Italian Independent Club, Inc. v. Commissioner, supra. The
license allowed WSA the privilege of conducting bingo games, a
fund raising activity; thus, the organization received an
economic benefit in return.
Based on our analysis, WSA's excess contributions qualify
for deduction as ordinary and necessary business expenses rather
than as charitable donations. Therefore, the excess
contributions are deductible under section 162(a). Further, the
excess contributions are directly connected to WSA's "instant
bingo" activities. We conclude that the payments made by WSA
from its bingo account to outside charities are deductible in
full under sections 162(a) and 512(a).
To reflect the foregoing and the concessions made by
respondent,
Decisions will be entered
under Rule 155.
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