- 18 -
Mobile Home Park, Inc. v. Commissioner, supra at 514; Paula
Constr. Co. v. Commissioner, supra at 1058.
It is a question of fact whether payments are made with an
intent to compensate for services performed. See Whitcomb v.
Commissioner, 733 F.2d 191, 194 (1st Cir. 1984), affg. 81 T.C.
505 (1983); Paula Constr. Co. v. Commissioner, supra at 1058-
1059. The relevant time for determining the requisite intent is
when the purported compensation payment is made, not, for
example, years later when an amended return is filed after the
start of an IRS audit. See King's Ct. Mobile Home Park, Inc. v.
Commissioner, supra at 514; Paula Constr. Co. v. Commissioner,
supra at 1059-1060; Joyce v. Commissioner, 42 T.C. 628, 636
(1964); Drager v. Commissioner, T.C. Memo. 1987-483.
In the instant case, the board of directors established
Atkinson’s salary and bonuses during its yearly meetings. The
board of directors, however, did not designate the construction
expenses as compensation for Atkinson’s services. The amounts of
the construction expenses were not reported on Atkinson’s Forms
W-2 from petitioner. On its books and corporate tax returns,
petitioner accounted for the construction expenses as cost of
goods sold instead of compensation. Further, when questioned by
Dunkin and Ameye about the $69,000 payment for part of the
construction expenses, Atkinson did not claim that these amounts
constituted compensation for services rendered by Atkinson.
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