Sunbelt Clothing Company, Inc., f.k.a. Unprinted T-Shirt Warehouse, Inc. - Page 2

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          Accuracy-related Penalty                                                    
          FYE       Deficiency           Sec. 6662(a)1                                
          7/29/90      $677,203             $135,441                                  
          7/28/91       650,359              130,072                                  
          8/02/92       499,789               99,958                                  
               1Respondent has conceded the accuracy-related penalty under            
          sec. 6662(a) for the years in issue.                                        

               After concessions, the sole issue for decision is whether              
          the amount of compensation paid by petitioner to its officers,              
          Daniel Bennett and Burton Sokol, was reasonable and thus                    
          deductible as a business expense under section 162(a).1                     

                                  FINDINGS OF FACT                                    

               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and second stipulation of facts are                
          incorporated herein by this reference.                                      
               Petitioner is a catalog wholesaler of fashionable women's              
          sportswear.  Its principal place of business was in San Antonio,            
          Texas, at the time the petition was filed in this case.                     
          Petitioner was incorporated on June 12, 1978, under the name                
          Unprinted T-Shirt Warehouse, Inc.  Its name was changed to                  
          Sunbelt Clothing Co. on January 25, 1991.                                   

               1Unless otherwise indicated, all section references are to             
          the Internal Revenue Code in effect for the taxable years in                
          issue, and all Rule references are to the Tax Court Rules of                
          Practice and Procedure.                                                     

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