- 17 -
amount. In such a case only the portion which was reasonable
would qualify for a deduction under � 162(a).” United States v.
Haskel Engg. & Supply Co., 380 F.2d 786, 788-789 (9th Cir. 1967).
We turn now to petitioners’ comparison argument. Petition-
ers do not cite, and we have not found, any authority supporting
that argument.19 In determining under section 162(a) whether an
advertising or promotional expenditure incurred by a taxpayer who
performs services on behalf of another taxpayer is reasonable or
unreasonable in amount, it may be appropriate, inter alia, to
compare such expenditure to the gross receipts of the taxpayer
performing such services. We conclude that in this case it would
be inappropriate in making such a determination to compare the
advertising or promotional expenditure of the taxpayer performing
services on behalf of another taxpayer to the gross receipts of
such other taxpayer. We reject petitioners’ comparison argument.
In advancing their position with respect to the deductions
at issue, petitioners fail to specify the amount of Mr. Hopkins’s
claimed Schedule C deduction of $67,084, which when added to the
$5,144 of advertising expenses that respondent allowed as a
deduction, is reasonable under section 162(a).20 Petitioners
19None of the cases on which petitioners rely supports
petitioners’ comparison argument. See, e.g., United States v.
Haskel Engg. & Supply Co., 380 F.2d 786, 788-789 (9th Cir. 1967);
Gill v. Commissioner, supra; Boomershine v. Commissioner, T.C.
Memo. 1987-384; Brallier v. Commissioner, T.C. Memo. 1986-42.
20The record does not permit us to estimate any such amount.
(continued...)
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011