- 73 -                                         
               I believe the facts noted below reflect the noncapital,                
          ordinary and necessary nature of all of the salary and overhead             
          expenses that are in issue herein and should control resolution             
          of this fact issue.                                                         
               (1) The salaries ACC paid were routine, reasonable and                 
          recurring, and the amounts thereof, including increases and                 
          bonuses thereto, were tied to overall net company profits, not to           
          the acquisition of specific installment loans.  As the Supreme              
          Court explained:                                                            
                    Of course, reasonable wages [salaries] paid                       
                    in the carrying on of a trade or business                         
                    qualify as a deduction from gross income.                         
                    * * *  [Commissioner v. Idaho Power Co., 418                      
                    U.S. 1, 13 (1974);  emphasis added.]                              
               (2) Generally, and for the most part, the specific benefits            
          initially received by ACC from the services of its employees                
          investigating proposed installment loans (namely, the receipt of            
          information needed to review the creditworthiness of potential              
          debtors on the installment loans) were exhausted or lost by ACC             
          almost simultaneously with the receipt of the benefits (i.e., for           
          various reasons the large majority of the proposed installment              
          loans that were investigated and considered by ACC were abandoned           
          within a day (majority op. p. 9)).  In my opinion, this fact                
Page:  Previous   63   64   65   66   67   68   69   70   71   72   73   74   75   76   77   78   79   80   81   82   NextLast modified: May 25, 2011