- 12 - petitioner could reasonably pay him in 1995. Richard Schwaeber advised him around the time petitioner redeemed Isidore Klein’s stock in January 1995 that, since he was taking on the responsibilities of two jobs (his and Isidore Klein’s), a salary of about $800,000 in 1995 would be reasonable. c. Other Employees Petitioner paid Jeffrey Schwaeber $164,900 in 1992, $173,500 in 1993, $146,900 in 1994, and $148,500 in 1995. In 1993, 1994, and 1995, petitioner had sales representatives to sell its products. Petitioner paid its sales representatives commissions of 5 percent. In 1980, petitioner’s board of directors (i.e., Isidore and Gertrude Klein) authorized Isidore Klein to conduct business on its behalf in Florida. From 1990 to 1996, Howard Appell (Appell) was petitioner's exclusive sales representative in Florida. In 1993, Appell talked to Jeffrey Schwaeber three to five times a week. Appell dealt with Steven Klein several times in 1993, 1994, and 1995, but not with Isidore Klein. G. Petitioner’s Financial History 1. Petitioner’s Sales and Taxable Income Petitioner's sales increased in nominal dollars from 1983 to 1995. Petitioner’s net income before taxes declined sharply as follows:Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011