JRJ Express Incorporated, A California Corporation, d.b.a. King Express International - Page 10

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          expenditure an appropriate expense to further or promote the                
          taxpayer's trade or business?  Id.                                          
               In applying the first prong of the Lohrke test, we take into           
          account whether there is "a clear proximate danger to the taxpayer          
          and * * * a payment made to protect an existing business from               
          harm."  Young & Rubicam, Inc. v. United States, 187 Ct. Cl. 635,            
          410 F.2d 1233, 1243 (1969).  The deduction is not allowed if the            
          taxpayer fails to demonstrate "a direct nexus between the purpose           
          of the payment and the taxpayer's business or income producing              
          activities".  Lettie Pate Whitehead Found., Inc. v. United States,          
          606 F.2d 534, 538 (5th Cir. 1979).                                          
               Here, the record reflects that the expenses attributable to            
          the incoming packages and envelopes from Guatemala had a definite           
          purpose related to petitioner's outbound U.S.-Guatemala courier             
          business.  Approximately 78 percent of items petitioner delivered           
          to Guatemala contained money orders or checks from Guatemalans              
          living in the United States to their family members back home. For          
          the most part, these individuals had temporary jobs and were highly         
          transient.  There was uncontroverted testimony that most of the             
          inbound mail contained requests for money.  In order to promote             
          petitioner's business, petitioner had to possess the means to               
          communicate with these transient workers. Petitioner accomplished           
          this by creating a "fluid mailing list" of Guatemalans living in            
          the United States for purposes of targeting customers.  We are              





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