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services. Mr. Podd testified that Plus provided Powertex services
in the nature of "general guidance" and "direction". More
specifically, it was Mr. Podd's uncontroverted testimony that Plus
reviewed sales invoices and entertained customers of Powertex.
Respondent contends that the fees paid to Plus are not
deductible because they lacked a business purpose and because Plus
was merely a holding company which failed to provide any significant
services to Powertex.
Respondent does not argue that the management fee payments were
not reasonable. At trial, petitioners offered credible testimony
that significant services were provided to Powertex through Plus.
On the record before us, we hold that the payments made by Powertex
to Plus as management fees during the years in issue were for
services actually rendered and that, therefore, they are deductible
under section 162.
IV. Issue 4: Whether Individual Petitioners Received
Constructive Dividends
FINDINGS OF FACT
Respondent determined that the Podds and Mrs. Podd received
constructive dividends from a variety of sources.14
14 On brief, respondent concedes that Mr. Podd did not receive
dividend income of $2,749,501 from his constructive receipt of
the Amoco patents from Powertex via the granting of patent rights
in his name during 1989. Petitioners conceded some of the items
of dividend income in the stipulations of facts. The only items
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