- 79 - Commissioner, supra at 443; see also Loftin & Woodard, Inc. v. United States, supra at 1214-1215; Crosby v. United States, supra at 1388; Magnon v. Commissioner, 73 T.C. 980, 993-994 (1980). Petitioners argue that the excess contributions were paid to the employee/owners as compensation for their services. We disagree. Whether amounts are paid as compensation turns on the factual determination of whether the payor intends at the time that the payment is made to compensate the recipient for services performed. See Whitcomb v. Commissioner, 733 F.2d 191, 194 (1st Cir. 1984), affg. 81 T.C. 505 (1983); King’s Ct. Mobile Home Park, Inc. v. Commissioner, 98 T.C. 511, 514-515 (1992); Paula Constr. Co. v. Commissioner, 58 T.C. 1055, 1058-1059 (1972), affd. without published opinion 474 F.2d 1345 (5th Cir. 1973). The intent is not found, as petitioners would have it, at or after the time that respondent challenges the payment’s characterization as something other than compensation. 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. The mere fact that petitioners now choose 32(...continued) dividend treatment. Nor is it precluded because the corporations did not formally distribute the cash directly to the owner/employees. See Loftin & Woodard, Inc. v. United States, 577 F.2d 1206, 1214 (5th Cir. 1978); Crosby v. United States, 496 F.2d 1384, 1388 (5th Cir. 1974).Page: Previous 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 Next
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