Sunbelt Clothing Company, Inc., f.k.a. Unprinted T-Shirt Warehouse, Inc. - Page 24

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          "peer group" CEO's, or $482,807, $532,621, and $622,714 for                 
          fiscal years 1990, 1991, and 1992, respectively.  Using similar             
          techniques, Mr. Burns provided estimates of Mr. Sokol's                     
          reasonable compensation for fiscal years 1990 and 1991 of                   
          $354,163 and $382,330, respectively.                                        
               Relying on Mr. Burns' report, respondent essentially argues            
          that Messrs. Bennett and Sokol are entitled to no more than the             
          industry average.  We do not find this argument persuasive.  The            
          regulations promulgated under section 162(a)(1) direct a                    
          comparison of salaries paid by similar businesses to similar                
          employees under similar circumstances.  Sec. 1.162-7(b)(3),                 
          Income Tax Regs.  However, section 162 is "not designed to                  
          regulate businesses by denying them a deduction for the payment             
          of compensation in excess of the norm" in cases where other                 
          factors call for higher compensation.  Home Interiors & Gifts,              
          Inc. v. Commissioner, 73 T.C. at 1162.                                      
               Respondent also introduced the report and testimony of                 
          Sigmund Wesolowski.  Mr. Wesolowski was the former president of             
          Pandora, Inc. (Pandora), a manufacturer, seller, and distributor            
          of sportswear.  Respondent argues that Pandora and petitioner               
          were similar companies and that Mr. Wesolowski and Mr. Bennett              

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