Joseph A. and Sari F. Deihl - Page 53

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               The final type of giveaway addressed by the parties was                
          separately discussed on brief and appears to have been given                
          principally for purposes other than motivation.  Concerning the             
          Boss Day Planners, Mr. Deihl testified:  “As a new distributor              
          came on board he received a day planner which also contained all            
          the policies and procedures of KareMor and the code of ethics               
          that they were to follow and what was dismissible and where we              
          could terminate even the independent distributor for immoral acts           
          or things of that nature.”  The record contains copies of checks            
          payable to Boss Day Planners, all dated 1999, which total                   
          $136,444.35.  Petitioners, through KareMor, claimed $113,544.35             
          of this expenditure as a deduction for marketing in 1998.                   
               On brief, respondent concedes that a valid business purpose            
          supported the outlay to Boss Planners but maintains that the                
          charges were contested in 1998 and not paid until 1999.                     
          Referencing the checks just described, respondent states:  “each            
          check is dated after April 14, 1999, the date of settlement of              
          the dispute between Petitioners and Boss Day Planners.”                     
          Petitioners’ response to this argument, consisting in its                   
          entirety of two sentences, is as follows:  “As to the Boss                  
          Planners marketing expense, Respondent recognizes (opening brief,           
          p.66) that the payments were made but not until after April 14,             
          1999.  However, 1999 is a closed year and thus, the deduction               
          should be permitted for 1998.”                                              






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