Sunbelt Clothing Company, Inc., f.k.a. Unprinted T-Shirt Warehouse, Inc. - Page 20

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          would expect to see a corresponding increase in sales for the               
          industry in general.  However, the evidence shows that the                  
          industry remained relatively stagnant over this period.                     
          Respondent's own expert lists the sales figures of 11 companies             
          in the clothing industry during 1990, 1991, and 1992.4  The                 
          combined sales for these companies dropped from $1,059,214,617 in           
          1990 to $997,443,690 in 1991 and rebounded to $1,078,385,309 in             
          1992.  This translates to an overall increase of only 2 percent             
          during this period.  Consequently, we find that the increase in             
          petitioner's sales, while partly due to fortuitous market                   
          circumstances, was due primarily to the insight and hard work of            
          Messrs. Bennett and Sokol.                                                  

          6.  Comparison of Salaries Paid With Distributions to Messrs.               
          Bennett and Sokol and Retained Earnings                                     

               The failure to pay more than minimal dividends may suggest             
          that reported compensation actually is (in whole or in part) a              
          dividend.  Owensby & Kritikos, Inc. v. Commissioner, 819 F.2d at            
          1323-1324; Charles Schneider & Co. v. Commissioner, 500 F.2d 148,           
          151-152 (8th Cir. 1974), affg. T.C. Memo. 1973-130.                         
          Corporations, however, are not required to pay dividends.                   
          Indeed, shareholders may be equally content with the appreciation           

               4Respondent's expert, Francis X. Burns of the IPC Group,               
          LLC, prepared a report on the compensation of Messrs. Bennett and           
          Sokol.  This report is discussed infra.                                     

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