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bands played at the Bullfrog, they typically played on Thursday,
Friday, and Saturday nights. Petitioner customarily paid the
bands in cash following each performance.
Bands featured at the Bullfrog were regularly advertised in
Nite-Line Magazine (Nite-Line), a local entertainment guide.
Petitioner advertised in Nite-Line 44 weeks during 1987, 48 weeks
during 1988, 39 weeks during 1989, and 44 weeks during 1990.
Available back copies of Nite-Line demonstrate that, during the
years in issue, petitioner regularly listed three band nights
(typically Thursday, Friday, and Saturday) in each
advertisement.12 Nite-Line records indicate that petitioner
incurred band advertising expenses of $1,596, $1,740, $1,416, and
$1,596 during 1987, 1988, 1989, and 1990, respectively.
Petitioner maintained no records of (1) the nights that
bands appeared or failed to appear, (2) the amounts that he paid
bands that performed at the Bullfrog, or (3) the amounts that he
paid for band advertising expenses. Petitioner issued no Forms
1099 to the bands that played at the Bullfrog. Petitioner
claimed no deduction for band or band advertising expenses for
the years in issue, and petitioner disclosed no band or band
advertising expenses to his return preparer, Mr. Dillon.
In the notice of deficiency, respondent allowed petitioner
deductions for band advertising expenses for 1987 and 1988 in the
amounts of $1,596 and $1,740, respectively, but allowed nothing
12 We note that several back copies of Nite-Line are not
available for the years in issue.
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