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ment, and Engineering Center Tank-Automotive and Armaments
Command, Armament Research, Development, and Engineering Center
located at Picatinny Arsenal. Pursuant to the 1999 contract, TGC
was to modify the computer simulator in order to accommodate
tactical projectiles and perform tests in order to make it
possible to evaluate smart munitions technology.
TGC entered into additional contracts after the 1999 con-
tract that required TGC to use the computer simulator.
Claimed Travel Expense Deduction
During the taxable years at issue, TGC had a contract
(Primex contract) with Primex Technologies, Inc. (Primex) under
which TGC was to provide consulting services to Primex. TGC
retained Tibor Horwath Consulting (i.e., Mr. Horwath) and Ms.
Jean P. Smith (Ms. Smith) to provide to Primex on TGC’s behalf
the consulting services required by the Primex contract. The
services that Mr. Horwath and Ms. Smith were to provide to Primex
on TGC’s behalf required Mr. Horwath and Ms. Smith to travel
extensively. Primex agreed to pay TGC for such travel expenses.
Pursuant to the Primex contract, TGC sent Primex an invoice
every month. Each such invoice reflected, inter alia, a separate
category labeled “Expenses by Dr. Tibor G. Horwath” and “Expenses
by Jean P. Smith”, which listed the respective travel expenses
paid by Mr. Horwath and Ms. Smith in providing to Primex on TGC’s
behalf the consulting services required by the Primex contract.
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Last modified: May 25, 2011