Theodore Langworthy, Jr. - Page 11

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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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