- 8 - Between November 1984 and January 1985, Dunkin and Edward Fryer from the accounting firm (accountants) met with Atkinson to provide tax advice with regard to petitioner’s taxable year ending March 31, 1985, and growing profitability. At that meeting, Atkinson informed the accountants that during petitioner’s board of directors meeting on April 4, 1983, the board of directors established Atkinson’s compensation package for petitioner’s taxable year ending March 31, 1984, and subsequent taxable years.5 In response, the accountants explained to Atkinson that petitioner’s compensation deductions for Atkinson’s salary and bonuses had to be justified and memorialized. The accountants advised Atkinson that to demonstrate reasonable compensation for tax purposes, petitioner should establish a formula based on the profitability of the company to determine Atkinson’s salary and bonuses. The accountants also suggested to Atkinson that petitioner maintain minutes for its board of directors meetings. Following the accountants’ advice, petitioner established a formula to determine Atkinson’s compensation and created and maintained minutes for petitioner’s board of directors meetings. The minutes for the board of directors meetings for March 30, 5 Petitioner’s board of directors consisted of the Atkinsons and a third party. On June 29, 1984, the board of directors was reduced to two directors consisting of only the Atkinsons.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011