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v. Commissioner, supra. In analyzing these factors, the Court
must carefully scrutinize the facts of a case in which the paying
corporation is controlled by the employees to whom the
compensation is paid. In such a situation, we must be convinced
that the purported compensation was paid for services rendered by
the employees as opposed to a distribution of earnings to them
that the payor could not deduct. RTS Inv. Corp. v. Commissioner,
supra at 650; Paul E. Kummer Realty Co. v. Commissioner, 511 F.2d
313, 315-316 (8th Cir. 1975), affg. T.C. Memo. 1974-44; Charles
Schneider & Co. v. Commissioner, supra at 152-153; Seven Canal
Place Corp. v. Commissioner, 332 F.2d 899 (2d Cir. 1964),
remanding T.C. Memo. 1962-307.
b. Employee's Qualifications
An employee's superior qualifications for his or her position
with the business may justify high compensation. See, e.g.,
Home Interiors & Gifts, Inc. v. Commissioner, supra at 1158;
Dave Fischbein Manufacturing Co. v. Commissioner, 59 T.C. 338,
352-353 (1972).
The Officers are exceptionally qualified for petitioner's
business, by virtue of their education, training, experience, and
dedication. They understand and control every aspect of
petitioner's operations. They are highly motivated and extremely
productive employees. They are the primary reason for
petitioner's success. The Officers’ outstanding qualifications
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