- 21 - agreement lacked economic significance and was in substance a disguised payment for goodwill or going-concern value. Petitioner argues that the consulting agreement has economic significance, because it needed Mr. Wright's assistance in dealing with Toyota. We recognize that Mr. Wright had extensive knowledge and experience in dealing with Toyota, and that this knowledge and experience would be helpful to petitioner. Furthermore, Mr. Wright did consult with petitioner's shareholders regarding Toyota. Respondent argues that petitioner's shareholders would have little, if any, need to consult with Mr. Wright. Petitioner's shareholders had extensive experience in the domestic and imported automobile dealership business, including experience with a Japanese manufacturer. However, petitioner's shareholders had no experience dealing with Toyota. The negotiations which culminated in the creation of the consulting agreement were conducted between Mr. Richardson and Mr. Wright, neither of whom testified. There was evidence that the buyers rejected the per diem portion of the proposed consulting agreement, because, according to their counsel, it made the consulting agreement look like a "sham". This sparse evidence regarding the negotiation of the consulting agreement does not indicate that the agreement had economic substance. Schulz v. Commissioner, 294 F.2d at 54-55; Buffalo Tool & Die Manufacturing Co. v. Commissioner, supra; Major v.Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
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