- 11 -
that Barbara was overcompensated for her services, at least from
1984 until May 1, 1989, during which period her weekly salary
increased significantly notwithstanding the substantial
curtailment of her responsibilities and time spent at the office.
In the absence of corroborating evidence, we accord little weight
to the self-serving recitals in the Pension Agreement. See,
e.g., Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).
We are similarly unimpressed with petitioner’s argument that
its business interests were served by providing a monetary
inducement for Barbara to retire because her office presence had
become disruptive. If an employee interferes with the efficient
operation of an employer’s business, we do not find it plausible
that the employer would “induce” the employee to retire with an
offer of full salary for life, adjusted for inflation. The
provisions connected with the termination of Barbara’s services
for petitioner make considerably more sense when placed in the
context of Barbara’s status as (1) the estranged former spouse of
petitioner’s controlling shareholder and (2) the probable holder
of a significant equitable interest in petitioner, by virtue of
her property rights arising from the marital relationship and/or
her contributions as a cofounder to petitioner’s success.
This is not to suggest that the characterization of the
payments by petitioner to Barbara is based on mere speculation.
We believe the Settlement Agreement, which is clearly
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011