Haffner's Service Stations, Inc. - Page 15




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          to petitioner that it pay a dividend, nor has petitioner ever               
          paid a dividend.                                                            
          Bonuses                                                                     
               Petitioner paid to Haff a $625,000 bonus in late 1990.  On             
          December 17, 1990, December 15, 1991, and December 17, 1992,                
          petitioner paid identical bonuses of $625,000, $475,000, and                
          $250,000, respectively, to Emile and Louise.  Petitioner did not            
          use a formula to decide the amount of any of these bonuses.                 
          Instead, Haff met with Rubin in December of each year to set the            
          amounts of the bonuses primarily on the basis of petitioner’s               
          profit for the corresponding year.  Haff, upon discussions with             
          Emile and Louise in their capacity as board members, set the                
          amounts of the bonuses at the amounts suggested by Rubin.  Haff             
          never discussed the payment of a dividend when he discussed the             
          subject bonuses with Rubin, Emile, or Louise.                               
               Petitioner apportioned to Parker and HCC $100,000 of each              
          bonus paid to Louise and Emile in 1990 and 1991, and petitioner             
          deducted as “Officers’ Compensation” the remaining amounts paid             
          to Louise and Emile.  Petitioner deducted Haff’s bonus as “Cost             
          of Goods Sold”.  For the respective subject years, petitioner               
          deducted the following types and amounts of compensation paid to            
          Emile and Louise:                                                           










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Last modified: May 25, 2011