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petitioner argues, signifies compensation for services. A
payment pegged to time worked may be nothing more than a payment
for services. It may, however, include a distribution of
profits, if the only recipients of such payments are the owners
of the enterprise. Cf. Klamath Med. Serv. Bureau v.
Commissioner, 29 T.C. 339, 348-349 (1957) (payments in proportion
to billings, but in excess of billings, were held to be, in part,
disguised dividends), affd. 261 F.2d 842 (9th Cir. 1958). Here,
all of the recipients of such payments were shareholders of
petitioner (shareholder surgeons). Three were full-time
employees, entitled to equal payments, while the fourth was a
part-time employee, entitled to a proportionate payment. That
disparity does not eliminate the possibility of a disguised
distribution of profit, but may reflect only an implicit
redistribution of ownership upon the decision of a shareholder
surgeon partially to retire.
We must determine whether there was a disguised distribution
of profit by petitioner to the shareholder surgeons.
2. Profit Attributable to Nonshareholder Employment
Agreements
Petitioner’s gross receipts in each of the audit years
exceeded $2 million. Balance sheets prepared for petitioner for
those years list as assets only cash, office equipment, leasehold
improvements, medical and surgical equipment, automobiles,
prepaid rent, and accrued interest (the balance-sheet assets),
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