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reasonable. Owensby & Kritikos, Inc. v. Commissioner, supra at
1325-1326; Home Interiors & Gifts, Inc. v. Commissioner, 73 T.C.
at 1155-1156.
During the fiscal years 1980 through 1988, petitioner paid
Messrs. Bennett and Sokol less compensation than they were
entitled to. Petitioner increased its yearly gross sales from
$547,842 in fiscal year 1980 to $39,802,165 by fiscal year 1989.
For the years in issue, Messrs. Bennett's and Sokol's salaries as
a percentage of gross sales, gross profit, net income (before
deducting their compensation and after paying taxes), and taxable
net income (before deducting their compensation) were:
Gross Gross Net Taxable
FYE Sales Profit Income Income
7/29/90 4.96 percent 16.00 percent 36.67 percent 26.78 percent
7/28/91 3.87 percent 13.83 percent 28.56 percent 20.78 percent
8/02/92 2.93 percent 10.79 percent 26.97 percent 18.35 percent
Averages 3.92 percent 13.54 percent 30.73 percent 21.97
percent
We find that these percentages are reasonable in light of
the qualifications of Messrs. Bennett and Sokol, the nature,
extent, and scope of their work, and the years of prior
undercompensation. See, e.g., Pulsar Components Intnl., Inc. v.
Commissioner, T.C. Memo. 1996-129; Acme Constr. Co. v.
Commissioner, supra; BOCA Constr., Inc. v. Commissioner, supra;
Universal Manufacturing Co. v. Commissioner, T.C. Memo. 1994-367;
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