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During the subject years, Commonwealth paid the following
commissions on the C-group products issued on the Malls’ lives:
Period
Beginning Kirwan Mr. Ankner1 Mr. Murphy
3/92 $8,922.94 $709.34 $2,498.67
3/93 852.82 136.88 273.74
1These commissions were paid to Mr. Ankner either
indirectly through one of his companies or directly.
Kirwan also received, in or about 1996, commissions equal to 5
percent of the conversion credit balances, both earned and
unearned, which were applied to the Malls’ C-group conversion UL
policies. These commissions totaled $4,266.09 (($44,182.90 x 5%)
+ ($41,138.80 x 5%)).
Respondent determined that Neonatology could not deduct its
excess contributions to the Neonatology Plan and increased
Neonatology’s income by $23,646 in 1992 and $19,969 in 1993 to
reflect the following adjustments:
1992 1993
Contributions to the Neonatology Plan $20,000 $22,623
Administrator’s fees 1,000 1,000
1991 NOL from plan contributions 4,272 —
Subtotal 25,272 23,623
Less: P.S. 58 costs included in income 1,626 3,654
Adjustment 23,646 19,969
Respondent determined primarily that the disallowed contributions
were not deductible under section 162(a) because they did not
17(...continued)
her life).
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