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controls the corporation's affairs. See Paula Constr. Co. v.
Commissioner, supra at 1058.
While we held the trusts were shams and should be ignored
for tax purposes, we find the consulting contract helpful for the
limited purpose of determining the intent of the parties. The
contract provides that "[Midwest] desires to contract the skills
and services of one Frank W. Muhich in the performance of
services on behalf of [Midwest]," and we find that petitioner
performed these services for Midwest during the subject years.
Before the subject years, petitioner worked as a principal
officer of Midwest, establishing its name recognition, overseeing
its business, and playing a key role in its success. His work-
related duties did not change after the trusts were formed; he
continued to own and operate Midwest exactly as before, and
Midwest continued to pay compensation for his services. We
conclude Midwest paid the "consulting fees" intending to
compensate petitioner for his services. In disregarding the
Asset Trust's existence for tax purposes, we view these payments
received directly by petitioner, the true earner of the income.
As to reasonableness, each year petitioner based his salary
upon the financial performance of Midwest. We view this as a
reasonable way for an owner of a closely held business to
compensate himself or herself. The contract in this case
specifically provides for compensation of $3,000 per month, plus
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