- 34 - essentially all profits7 to the shareholder surgeons as salary for services performed by them was based upon a good faith belief that such was the case. Cf. Comenout v. Commissioner, T.C. Memo. 1982-40, affd. 746 F.2d 1484 (9th Cir. 1984). Although it happened that, for the audit years, profits attributable to the nonshareholder surgeons were small (and, for 1995, practically nil), such need not have been the case. For example, in 1996, collections attributable to Dr. Vaughan (still a nonshareholder surgeon), totaled just under $460,000 as compared to $491,000 for Dr. Mann. Under such circumstances, the shareholder surgeons could not reasonably conclude that all pre-distribution profits were solely attributable to services performed by them and, therefore, available for bonus payments to them. It is the shareholder surgeons’ utter indifference to the possibility that a portion of the annual prebonus profits might have been derived from collections generated by nonshareholder surgeons that justifies respondent’s imposition of the accuracy- related penalty in this case. 7 Based upon Dr. Mann’s testimony that the bonuses to the shareholder surgeons consisted of all available cash less the amount necessary to meet anticipated expenses, we find that the small amount of taxable income reported for each of the audit years ($29,255 for 1994 and $49,323 for 1995) was no more than the yearend set-aside needed to meet anticipated immediate and near-term expenses for the following year.Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Next
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