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3. Answer
In the answer, with respect to the quoted language from the
petition, respondent admits the first sentence and denies the
remainder of the paragraph.
D. Petitioner’s Claim
With respect to the notice, petitioner makes reference to
section 162(a), which, in pertinent part, states:
SEC. 162. TRADE OR BUSINESS EXPENSES.
(a) In general.--There shall be allowed as a
deduction all the ordinary and necessary expenses paid
or incurred during the taxable year in carrying on any
trade or business, including--
(1) a reasonable allowance for salaries or
other compensation for personal services
actually rendered;
Petitioner claims: “The only issue reasonably inferred from the
wording of * * * [the notice] is one of reasonable compensation.
That is, whether the money paid to the shareholder surgeons as
salary was reasonable such that Petitioner’s deductions of these
payments was [sic] proper under I.R.C. � 162(a).” Petitioner
argues that respondent has raised a new issue because he has
changed his theory of the case: “Respondent’s new theory * * *
is that Petitioner paid a dividend to the shareholder surgeons
equal to the actual collections of the non-shareholder doctors
minus the costs and overhead allocable to the non-shareholder
doctors.”
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