- 38 -
Commissioner, 78 T.C. at 890 n.13; Keller v. Commissioner, 77
T.C. 1014, 1030-1031 (1981), affd. 723 F.2d 58 (10th Cir. 1983).
Of course, in the case at hand petitioner employed a purported
trust in his diversion scheme, and the Moline Properties, Inc.
policy favoring the recognition of shareholders and corporations
as separate taxable entities is simply not applicable.
Third, even when we respect a PSC as the true earner, this
does not end our examination; we then evaluate the arrangement
between the shareholder and the PSC under section 482. In so
doing, we consider whether the shareholder’s total compensation
from the PSC was essentially equivalent to that which he would
have received if he had not employed the PSC structure. See,
e.g., Haag v. Commissioner, 88 T.C. 604, 614-615 (1987), affd.
without published opinion 855 F.2d 855 (8th Cir. 1988); Keller v.
Commissioner, 77 T.C. at 1024-1025. This analysis ensures that
the shareholder will be taxed on the reasonable value of his
services, except to the extent his taxable income is reduced by
Code provisions that specifically provide for deferral or
nonrecognition of income (e.g., qualified pension plan
provisions). We repeat that in the case at hand petitioner did
not report (and has not conceded) that he received any salary (or
other income) as a result of the payments made to Universal for
his services. Moreover, Universal’s 1993 tax return claimed a
deduction for a distribution of Universal’s entire net income to
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