Leonard Pipeline Contractors, Ltd. - Page 20

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           ability to obtain contracts from all over the world.  Mr. Leonard                              
           was dedicated to his work and essential to petitioner's business.                              
                 While Mr. Leonard was the driving force behind petitioner, he                            
           was in the process of retiring during the year in issue and reduced                            
           his workload to 7-8 hours a day, 6 days a week.  While these hours                             
           are less than he worked in previous years, Mr. Leonard's reduced                               
           workload must be balanced against his 40 years of knowledge and                                
           experience in the industry.                                                                    
                 We are mindful that petitioner's sole activity during the year                           
           in issue was to report income, which had previously been earned, on                            
           a contract-completed basis.  However, because part of the bonus was                            
           attributable to Mr. Leonard's past services, we consider this fact                             
           unimportant.                                                                                   
                 Finally, Mr. Leonard personally guaranteed petitioner’s $1.5                             
           million debt to the Royal Bank of Canada.  While Mr. Leonard                                   
           testified that guaranteeing debts was his normal method of                                     
           conducting business, we believe that the personal guaranty further                             
           illustrates Mr. Leonard's importance to petitioner. See Owensby &                              
           Kritikos, Inc. v. Commissioner, supra.                                                         
                 This factor favors petitioner.                                                           
           (2) External Comparison                                                                        
                 This factor compares the employee’s compensation with that paid                          
           by similar companies in similar industries for similar services.                               








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