Neonatology Associates, P.A., et al - Page 79




                                               - 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).                                                           





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