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For purposes of petitioner's plan, Mr. Clendenen is covered as an
employee of petitioner and thus, only with respect to the
compensation received as petitioner's employee. We do not
dispute petitioner's argument that Mr. Clendenen was an officer
of petitioner and that an officer is an employee. But the fact
of the matter is that petitioner adopted an arrangement whereby
Mr. Clendenen was not compensated for whatever services he may
have rendered as an officer-employee but for his services as an
independent contractor. We hold, therefore, that the amounts
petitioner paid to Mr. Clendenen as an independent contractor are
not includable in compensation.
We now determine whether the annual additions on behalf of
Mr. Clendenen exceed the section 415(c) limits. With the
exception of 1988, for which the parties agree Mr. Clendenen's
compensation was $0, the record is not clear as to the exact
amounts of compensation paid to Mr. Clendenen.9 We need not make
any findings with respect to the exact figures, however, for
9 The amounts deducted by petitioner as officer
compensation on its returns for 1986 and 1987 do not match those
reported by Mr. Clendenen on his individual returns. While this
could be due to the different tax years involved (year ending
June 30 versus December 31), respondent, in the revocation letter
and in his briefs, uses the lower figures appearing on Mr.
Clendenen's returns due to lack of substantiation. Petitioner
does not address the difference for 1986, and for 1987, uses the
lower figure in its brief. For 1989 through 1991, respondent
treats the amounts shown as salaries and wages on petitioner's
corporate returns as compensation paid to Paul Clendenen.
Petitioner does not argue that these amounts were paid to Mr.
Clendenen.
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