Mason owns Brickman, Inc., which specializes in laying brick patios, terraces, and walkways. Mason bids on a contract with State University to build several large terraces as well as the walkways adjoining the terraces. Although he is the low bidder, Mason is approached by Don, purchasing agent for State University, who lets Mason know that to secure the contract, Mason must make a cash payment to a firm that is building a swimming pool for Don. Mason makes the required payment and secures the contract. Later, Don demands, and Mason makes, a payment to a rancher for the purchase of a horse for Don’s children. The payments made by Mason are not illegal under state law. Mason seeks your advice as to the deductibility of these payments.
Read and analyze the following authorities, and determine whether Mason can deduct the payments he made to Don:
Sec. 162.
Raymond Bertolini Trucking v. Comm., 736 F.2d 1120 (6th Cir., 1984).
Car-Ron Asphalt Paving Co. Inc. v. Comm., 758 F.2d 1132 (6th Cir., 1985).