- 12 -
Petitioner deducted the following Officers' compensation on its
Federal corporate income tax returns for those years as follows:
Taxable
Year Ended Deduction Claimed
July 31 Mr. Laviano Mr. Woll Total
1983 $11,000 $15,000 $26,000
1984 729,000 720,000 1,449,000
1985 1,461,000 1,461,000 2,922,000
Total 2,201,000 2,196,000 4,397,000
A comparison of the Officers' compensation and their stock
ownership interests is as follows:
Taxable
Year Ended
July 31 Mr. Laviano (55%) Mr. Woll (40%)
1983 42.3% 57.7%
1984 50.3 49.7
1985 50.0 50.0
d. Board Resolution Concerning Undercompensation
Petitioner's board met on August 6, 1984, and reported that
each of the Officers was actually paid less than the amounts that
were fixed in their employment agreements. Specifically, the
board found, the Officers were entitled to receive $650,000 per
year, but were actually paid the following amounts:
1983 1984
Thomas Laviano $11,000 $729,000
Peter Woll 15,000 720,000
The board decided that petitioner owed Mr. Laviano $560,000 and
that petitioner owed Mr. Woll $565,000. The board unanimously
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011