- 31 -
years, we find that the proper expense allocations are as
follows:
1994 1995
Respondent’s allocation $100,482 $110,356
1/10 of rent expenses 6,235 5,795
1/10 of repair and maintenance 333 893
1/10 of office equipment depreciation 2,397 2,158
1/10 of telephone expenses 1,237 1,168
1/10 of equipment lease expenses –- 399
Total 110,684 120,769
d. Profit
For the audit years, we find that the net profit
attributable to the nonshareholder surgeons was as follows:
1994 1995
Collections $171,918 $129,806
Expenses (110,684) (120,769)
Profit 61,234 9,037
D. Conclusion
We hold that the deductions claimed by petitioner for 1994
and 1995 for salaries paid to the shareholder surgeons exceed
reasonable allowances for services actually rendered by them by
the amounts of $61,234 and $9,037, respectively, and that such
amounts, therefore, are not deductible by petitioner under
section 162(a)(1). We sustain respondent’s determination of a
deficiency to the extent attributable to such disallowances.
III. Accuracy-Related Penalty
Section 6662 provides for an accuracy-related penalty (the
accuracy-related penalty) in the amount of 20 percent of the
portion of any underpayment attributable to, among other things,
Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 NextLast modified: May 25, 2011