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counsel that IL NA Tours paid him $41,127 in rent for the use of
space in his Lincoln Avenue I property. We are persuaded that
the $41,127 deducted on IL NA Tours’ 1988 return consisted of
rental payments for commercial office space in cities where IL NA
Tours maintained branch offices.
The checks petitioner submitted for 1988 were drawn on bank
accounts maintained by IL NA Tours, NY NA Tours, or CA NA Tours
and total $41,672.28, which approximates the amount IL NA Tours
deducted as rental expense. Chung signed most of the checks. He
testified that the office rents reflected in the corporation’s
workpapers were payments for office space rented by branch
offices maintained by IL NA Tours in various cities. He also
testified that it would have been his practice to obtain the
numbers reflected in the workpapers from the listing of accounts
payable. As controller of IL NA Tours, Chung would be in a
better position than petitioner to know the recipients of
payments that IL NA Tours had deducted on its 1988 return.
Respondent’s argument that the payments do not add up to the
$53,552 in issue is misleading inasmuch as those checks relate to
payments made by IL NA Tours, which deducted $41,127. The
balance of the $53,552 relates to the $12,425 deducted by Air
America. Petitioner did not submit any checks written on
accounts maintained by Air America.
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