Sunbelt Clothing Company, Inc., f.k.a. Unprinted T-Shirt Warehouse, Inc. - Page 31

                                       - 31 -                                         

          of reasonable compensation prior to Mr. Sokol's negotiations with           
          Mr. Bennett on this issue.  Mr. Barber testified that he met with           
          Mr. Bennett on behalf of Mr. Sokol to discuss the relative values           
          of Messrs. Bennett and Sokol to petitioner.  Following this                 
          meeting, it was Mr. Barber's opinion that the services rendered by          
          Mr. Bennett were more valuable to petitioner than the services              
          rendered by Mr. Sokol.8  Based on his research, Mr. Barber                  
          recommended several different compensation plans to Mr. Sokol               
          regarding various methods to allocate compensation between Mr.              
          Sokol and Mr. Bennett.                                                      


               Based upon all the facts and circumstances of this case, we            
          hold that the amounts that petitioner deducted in fiscal years              
          1989, 1990, and 1991 as compensation to Messrs. Bennett and Sokol           
          are reasonable.  Therefore, petitioner is entitled to deductions            
          for officer compensation in the amounts claimed.                            

                                             Decision will be entered                 
                                        for petitioner.                               

               8We place no reliance on Mr. Barber's opinion other than to            
          show that Mr. Sokol sought his advice in what appears to be an              
          arm's-length negotiation over the amount of Mr. Bennett's                   

Page:  Previous  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  

Last modified: May 25, 2011