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Interiors & Gifts, Inc. v. Commissioner, supra at 1157-1158
(extraordinary corporate performance is evidence that officer's
compensation is not excessive); see also Kennedy v. Commissioner,
supra; cf. National Cottonseed Prods. Corp. v. Commissioner, 76
F.2d 839 (6th Cir. 1935) (poor performance did not justify
compensation paid), affg. in part and revg. in part 28 B.T.A. 67
(1933). Furthermore, the 1990 gross receipts were 98 percent
greater than the 1989 receipts, yet expenses increased by only 27
percent. Petitioner's successful cost containment is
attributable in part to innovative management programs which were
developed by Rogers and Worley.
Significantly, petitioner increased its business and revenues
during a time of a nursing shortage. Petitioner's ability to
increase its business while presented with a restricted labor
force was due in part to petitioner's use of an innovative
compensation plan for the nurses and the use of the drug
interaction system. The compensation plan and the drug
interaction system were both developed in part by Rogers. This
factor favors petitioner.
3. Size and Complexities of Petitioner's Business
Petitioner's gross receipts--an indicator of its size--were
$9,880,760 in 1990. From 1986 to 1990, the number of employees
at petitioner increased from 2 (Rogers and his wife) to 60, and
the number of client locations increased from 1 to 43, which
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