Howard E. Clendenen - Page 11

                                       - 11 -                                         

          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.                                                                  




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011