- -13
Inc. v. Commissioner, 399 F.2d 603, 606 (9th Cir. 1968), affg.
T.C. Memo. 1967-7; Home Interiors & Gifts, Inc. v. Commissioner,
73 T.C. 1142, 1156 (1980). 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,
877 F.2d 647, 650 (8th Cir. 1989), affg. per curiam T.C. Memo.
1987-98; 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, 500 F.2d 148, 152-153 (8th Cir.
1974), affg. T.C. Memo 1973-130; Seven Canal Place Corp. v.
Commissioner, 332 F.2d 899 (2d Cir. 1964), remanding T.C. Memo.
1962-307.
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).
Mr. Haviv is highly qualified to run petitioner's business
as a result of his education, training, experience, and mental
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