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Co. v. Commissioner, 8 T.C. 1297 (1947), affd. 168 F.2d 71 (2d
Cir. 1948).
A. Responsibility for the TMI Expenses–-The Alleged Oral
Sponsorship Agreement
1. The Parties’ Positions
Petitioners contend that, since TMI’s formation in 1992,
Menards and TMI have had an oral agreement that Menards would
sponsor TMI’s Indy cars. In lieu of a formal sponsorship fee,
petitioners explain, Menards agreed to pay the TMI expenses in
exchange for the “full benefits of a founding sponsor.”54 In
contrast, respondent contends that there was no oral sponsorship
agreement.
2. Terms of the Alleged Oral Sponsorship Agreement
At trial, Mr. Menard testified that when TMI was formed in
1992, Menards made an oral agreement with TMI to pay some of
TMI’s racing expenses in exchange for “all the benefits of the
sponsorship”. As Mr. Menard understood the term “benefits”, TMI
54Petitioners describe the “full benefits” of a “founding
sponsor” to include the following:
significant, prominent name identification on the race
cars, team uniforms, transporters, race car
transporters, pit walls and all publicity and
promotional materials developed by the team and the
IRL[;] hospitality at the races for * * * [Menards’s]
suppliers, customers, and guests[;] naming rights for
the entries[;] tickets[;] access to viewing suites[;]
parking privileges[;] name and likeness grants[;] as
well as personal appearances of the TMI drivers.
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