Danville (P) was a closely held corporation by Buchanan and his wife and other relatives. Buchanan served as the president. P manufactures plywood for use in kitchen cabinets and other uses. P sells to wholesale distributors. Each order is a custom order, and P does not maintain a finished products inventory. P used accrual methods. P claimed deductions in 1980-81 of $103,444.51 in connection with a weekend trip for 120 people to the Super Bowl in New Orleans. P used current and potential income from each customer to decide whom to invite. P asked each customer to send those parties with decision-making authority. The majority of the customers sent one individual who was accompanied by that individual’s spouse. Six employees of P went along with five employee spouses, one shareholder’s daughter and three of Buchanan’s children and four of his friends. The rest were customers of P and 38 spouses of those customers, two children of one customer and three customers of customers. When making the arrangements for the trip, P did not inform the service companies involved that the trip was for business and P failed to request any business rooms for meetings. The letter soliciting P customers did not contain any reference to the business aspects of the trip. P did distribute a memo to P employees that were going to promote P products and to pump them for more product information and needs regarding a cut to size saw. When the customers arrived some of P's products were displayed in the lobby, and P employees met informally with customers. At dinner, there was no mention of business, and none of the customers placed orders that weekend but some promised to contact P in the future. The deductions were disallowed. P appealed.

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