Pediatric Surgical Associates, P.C. - Page 14




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                    3.  Answer                                                        
               In the answer, with respect to the quoted language from the            
          petition, respondent admits the first sentence and denies the               
          remainder of the paragraph.                                                 
               D.  Petitioner’s Claim                                                 
               With respect to the notice, petitioner makes reference to              
          section 162(a), which, in pertinent part, states:                           
               SEC. 162.  TRADE OR BUSINESS EXPENSES.                                 
               (a) In general.--There shall be allowed as a                           
               deduction all the ordinary and necessary expenses paid                 
               or incurred during the taxable year in carrying on any                 
               trade or business, including--                                         
                    (1) a reasonable allowance for salaries or                        
                    other compensation for personal services                          
                    actually rendered;                                                
          Petitioner claims:  “The only issue reasonably inferred from the            
          wording of * * * [the notice] is one of reasonable compensation.            
          That is, whether the money paid to the shareholder surgeons as              
          salary was reasonable such that Petitioner’s deductions of these            
          payments was [sic] proper under I.R.C. � 162(a).”  Petitioner               
          argues that respondent has raised a new issue because he has                
          changed his theory of the case:  “Respondent’s new theory * * *             
          is that Petitioner paid a dividend to the shareholder surgeons              
          equal to the actual collections of the non-shareholder doctors              
          minus the costs and overhead allocable to the non-shareholder               
          doctors.”                                                                   







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Last modified: May 25, 2011