- 6 -
implicit in such statement is that the payment represented
compensation for services rendered for years prior to 1996.
Petitioner's position at trial was that, in Bogardus v.
Commissioner, 302 U.S. 34 (1937), similar payments were made to
former employees of a merged corporation, and those payments were
held to be gifts. In that case, however, the Supreme Court found
that the facts and circumstances clearly reflected an intention
to make a gift, and, accordingly, the payments to employees and
former employees were not includable in gross income. The facts
in this case, however, do not establish an intention by the
Company to make a gift to its former employees or that it
proceeded from a detached and disinterested generosity out of
affection, respect, admiration, charity, or like impulses. The
Company's intention, as reflected in the record before the Court,
was an appreciation for the services of its present and former
employees and the Company's desire to enhance the compensation of
its employees and retirees for their past services. Respondent
is sustained on this issue.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.
Page: Previous 1 2 3 4 5 6 7
Last modified: May 25, 2011