Jenkins v. Commissioner
United States Tax Court
T.C. Memo. 1983-667 (1983)
Country singer Conway Twitty (plaintiff), whose legal name was Harold Jenkins, started a failed restaurant, Twitty Burger, with several friends who were also in the country-music industry. Though under no legal obligation to do so, Twitty personally reimbursed the investors for their losses to protect his reputation in the industry, and he deducted those reimbursements as business expenses. The Commissioner (defendant) disallowed the deduction, and Twitty sought redetermination in the U.S. Tax Court.
Whether, under federal tax law, a taxpayer may deduct payments for another's expenses when the taxpayer's primary motivation is business in nature and there is a sufficient relationship between the expenses and the taxpayer's business.