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Scruggs-Vandervoort-Barney, Inc. v. Commissioner, 7 T.C. 779
(1946); Moloney Elec. Co. v. Commissioner, 42 B.T.A. 78 (1940),
affd. in part and revd. in part on another issue 120 F.2d 617
(8th Cir. 1941); First Natl. Bank v. Commissioner, 35 B.T.A. 876
(1937); Metro Land Co. v. Commissioner, T.C. Memo. 1981-335;
Hudlow v. Commissioner, T.C. Memo. 1971-218. In Lohrke v.
Commissioner, 48 T.C. 679, 688 (1967), we articulated a two-part
test for determining whether a taxpayer’s payments are eligible
for this exception: (1) The taxpayer’s primary motive for paying
the expenses was to protect or promote the taxpayer’s business,
and (2) the expenditures constituted ordinary and necessary
expenses in the furtherance or promotion of the taxpayer’s
business. See also Square D. Co. & Subs. v. Commissioner, 121
T.C. 168, 198-201 (2003).
1. Menards’s Primary Motive for the TMI Payments
Regarding the first prong of the Lohrke test, the taxpayer
must establish a direct nexus between the payment’s purpose and
the taxpayer’s business. See Bone v. Commissioner, T.C. Memo.
2001-43; JRJ Express, Inc. v. Commissioner, T.C. Memo. 1998-200
(citing Lettie Pate Whitehead Found., Inc. v. United States, 606
F.2d 534, 538 (5th Cir. 1979)). Accordingly, we consider whether
the taxpayer made the payments primarily to promote its
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