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sale; and Menards’s guests at the races had access to the garage,
the pits, the track, and the drivers for photos and autographs.
In order to determine what portion of the TMI expenses was
reasonable in amount, we turn to the sponsorship fees TMI’s other
primary sponsors paid. Cf. Gill v. Commissioner, T.C. Memo.
1994-92 (arm’s-length standard of reasonableness based on the
amount the taxpayer’s corporation paid to sponsor an independent
third-party’s racing activities). For the 1997 IRL season,
Glidden and Quaker State paid $1.8 million and approximately $1.5
million, respectively, in sponsorship fees. In addition to
paying a sponsorship fee, Glidden provided TMI with financial
assistance estimated to be worth at least $550,000, which would
increase Glidden’s total sponsorship payment to $2.35 million.
In exchange for their total sponsorship fees, Glidden and Quaker
State received primary sponsorship designations for the Tony
Stewart car and Robbie Buhl car, respectively, and less prominent
logo placement on the car for which they were not designated
primary sponsors.68
For the 1998 IRL season, Glidden paid TMI a sponsorship fee
and provided additional financial assistance for a total of at
least $2.55 million. As in 1997, Glidden received primary
68Menards likely charged higher sponsorship fees for
Mr. Stewart’s car because, in 1996, Mr. Stewart was named the
Indy 500 Rookie of the Year and the fastest rookie in the history
of the Indy 500.
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