- -3
Petitioner has paid Mr. Haviv the following amounts in
compensation:
Year Salary Bonus/Commission Total Compensation1
1984 $0 $10,000 $10,000
1985 0 25,000 25,000
1986 0 25,000 25,000
1987 12,000 35,000 47,000
1988 26,000 125,000 151,000
1989 28,000 95,000 123,000
1990 30,000 105,000 135,000
1991 40,000 562,000 601,077
1992 68,000 535,000 603,269
Petitioner's board of directors (the board), consists solely of
Mr. and Mrs. Haviv. The board approved Mr. Haviv's
bonuses/commissions for 1991 and 1992 at the end of each
respective year.2
Petitioner is located in a secluded office building "quite
distant" from any major highway, retail district, or mall.
Petitioner does not advertise. Rather, petitioner's reputation
enables it to operate by word of mouth. Petitioner purchases its
jewels from diamond exchanges, mostly in Antwerp, Belgium, and
Tel Aviv, Israel, as well as from side holders and wholesalers
1 The parties have stipulated that Mr. Haviv's total
compensation for 1991 and 1992 is $601,077 and $603,269,
respectively. We note, however, that Mr. Haviv's salary and
bonus/commission for 1991 and 1992 actually total $602,000 and
$603,000, respectively. We find that the $923 difference for
1991 is a concession by respondent, and the $269 difference for
1992 is a concession by petitioner.
2 Mr. and Mrs. Haviv's bonuses/commissions for 1984
through 1990 were also approved at the end of each respective
year.
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