- 19 - Return Financial Statement Total Officer Total Officer Year Dennis Curtis Compensation Compensation 1986 $134,310 $60,690 $195,000 $195,000 1987 40,641 40,641 81,282 81,282 1988 74,206 51,706 125,912 285,912 1989 160,456 80,456 240,912 243,090 1990 207,239 97,239 304,478 304,478 1991 745,050 345,050 1,090,100 930,100 1992 593,350 193,350 786,700 788,400 1993 784,470 204,450 988,920 988,920 1994 847,109 399,260 1,246,369 1,246,437 1995 1,048,200 246,688 1,294,888 1,293,948 1996 699,192 400,573 1,099,765 1,099,825 Since its incorporation in 1985, petitioner has neither paid nor declared any dividends. Petitioner timely filed its Forms 1120 for the taxable years 1995 and 1996 with the Internal Revenue Service Center at Kansas City, Missouri. On November 25, 1998, respondent issued a notice of deficiency to petitioner for the taxable years ending October 31, 1995 and 1996. Respondent's proposed adjustments concerned only the reasonableness of petitioner's total officer compensation payments made to Dennis and Curtis. OPINION A. Positions of the Parties On its Forms 1120, petitioner deducted officer compensation of $1,294,888 ($1,048,200 for Dennis and $246,688 for Curtis) in 1995 and $1,099,765 ($699,192 for Dennis and $400,573 for Curtis) in 1996. Petitioner contends that the amounts paid to Dennis and Curtis were reasonable and were for services they provided to petitioner.Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
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