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Indirectly, the payment of these salaries provided
Davenport with a long term benefit. [Wells Fargo & Co.
& Subs. v. Commissioner, 224 F.3d at 887-888.]
Judge Bright wrote a concurring opinion in Wells Fargo & Co.
& Subs. to highlight the fact that the record did not allow for a
determination as to the portion of the salaries which were
directly related to the transaction. Judge Bright wrote:
I write separately to emphasize that the record in this
case is inadequate to show that the portion of the
salaries in question, $150,000, was directly or
substantially related to the acquisition. Moreover,
the tax court’s findings of fact on this issue does not
address the direct or indirect relationship of the work
of the officers to the acquisition. That finding
recited:
During 1991, DBTC [Davenport] had 9
executives and 73 other officers
(collectively, the officers). John Figge,
James Figge, Thomas Figge, and Richard Horst
worked on various aspects of the transaction,
as did other officers. None of the offices
were hired specifically to render services on
the transaction; all were hired to conduct
DBTC’s day-to-day banking business. DBTC’s
participation in the transaction had no
effect on the salaries paid to its officers.
Of the salaries paid to the officers in 1991,
$150,000 was attributable to services
performed in the transaction. DBTC deducted
the salaries, including the $150,000, on its
1991 Federal income tax return. Respondent
disallowed the $150,000 deduction; i.e., the
portion attributable to the transaction. * *
*
This finding does not address whether some
officers at any particular period of time devoted
substantial work to the acquisition or whether the
officers during the period of time in question only
incidentally worked on the acquisition while doing
regular banking duties.
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