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(the petitioner K-1) attached to the Niesar Pahl 1990 return,
petitioner is identified as a shareholder of the corporation.
Petitioner is likewise identified as a shareholder on a Schedule
K-1 attached to Niesar Pahl’s 1989 income tax return.
Petitioner’s compensation package resembled that of a
shareholder-employee, not a nonshareholder-employee. Niesar Pahl
was engaged in a service business, the practice of law, and, as
law firms go, it was not particularly large. Petitioner’s
positions, as president, managing partner, and chief financial
officer, strike us as typical of an owner (partner) or principal,
rather than as a mere employee.
Indeed, the minutes of the August 3 meeting of the board of
Niesar Pahl state that the corporation “shall issue and sell to
* * * [petitioner] one thousand (1,000) shares of common stock,
such action to take effect on August 9, 1989". (Emphasis added.)
There is no explicit date for satisfaction of the price term:
the price to be paid by * * * [petitioner] for such
shares shall be determined by an audit of the
corporation’s balance sheet as at July 31, 1989; and
* * * [petitioner] shall pay in cash, the amount equal
to * * * [one-quarter] of the net worth of the
corporation as determined by reference to such audited
balance sheet as at July 31, 1989, as and for the total
purchase price of said purchasers’ [sic] 1000 shares of
common stock.
1(...continued)
since Niesar testified that he actually saw Pahl sign the
guarantee. We disbelieve petitioner’s testimony to the contrary.
The requirements of Fed. R. Evid. 1003 are met, and Exhibit O was
properly received into evidence.
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