- 12 -
During fiscal years 1990 through 1992, Messrs. Bennett and
Sokol were paid the following salaries:
FYE Mr. Bennett Mr. Sokol
7/29/90 $2,030,000 $670,000
7/28/91 2,030,000 670,000
8/02/92 2,050,192 173,077
Petitioner deducted these amounts.
In the notice of deficiency, respondent disallowed
petitioner's deductions for salaries paid to Messrs. Bennett and
Sokol that were in excess of the following amounts:
FYE Mr. Bennett Mr. Sokol
7/29/90 $485,027 $230,202
7/28/91 541,273 252,634
8/02/92 585,391 1N/A
1Compensation paid to Mr. Sokol for the 1992 fiscal year is
not in dispute.
OPINION
The sole issue for decision is whether the amounts
petitioner paid to Messrs. Bennett and Sokol from fiscal years
1989 through 1992 constituted reasonable compensation for
services rendered within the meaning of section 162(a)(1).3
3Sec. 162(a)(1) allows as a deduction a reasonable allowance
for compensation for personal services actually rendered.
Respondent concedes that the amount of any compensation found to
(continued...)
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