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of the parties, petitioner is entitled to deduct the amount of
such fees from its gross income under section 162(a)(1).24
There is no evidence to suggest that ECI’s reimbursements to
Crocus were reduced by the fees collected by Crocus. There is no
evidence to suggest Crocus remitted such fees to either ECI or
petitioner.
We find that fees collected by Crocus during the taxable
periods at issue from exhibitors located in the former Soviet
Union were retained by Crocus. We also find that fees collected
and retained by Crocus from exhibitors domiciled in the former
Soviet Union were available to pay Crocus’s overhead expenses
with respect to foreign trade shows.
Unlike the inherently vague stipulation of facts for pre-
January 1, 1995, foreign trade shows, petitioner and respondent
stipulated “the total gross revenues from exhibition fees for
foreign trade shows” conducted during the taxable periods at
issue to be included in petitioner’s gross income. It may fairly
be inferred from the stipulation that “total gross revenues from
exhibition fees for foreign trade shows” includes fees collected
24We reject petitioner’s argument that the Court should
allocate Crocus a markup on its direct expenses as compensation
for its services and that such markup should be estimated under
the Cohan rule (Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d
Cir. 1930)). We shall not attempt to estimate Crocus’s
compensation under the Cohan rule because the stipulated record
provides enough information to calculate the exact amount of fees
collected by Crocus from exhibitors located in the former Soviet
Union and retained by Crocus as compensation for its services in
operating the foreign trade shows.
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