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Haff, Emil, and Louise collectively, rather than individually,
and he drew no distinction among Haff, Emile, and Louise as to
the reasonableness of each individual’s compensation. To
Fishman’s mind, each officer’s compensation is reasonable under
section 162(a)(1) if the aggregate amount of compensation is
reasonable for the services performed by all of the officers. We
disagree. In fact, even Fishman recognized the impropriety of
his approach when he answered the Court’s question as to why he
included Haff’s compensation in the analysis of the
reasonableness of Emile and Louise’s compensation. The colloquy
went as follows:
The Court: by including the third person and
including that salary in here, we’re throwing into this
mix something that is not relevant. I mean, suppose,
for instance, the third person’s salary was $10,000?
Or suppose it was $500,000? It certainly has an
impact, and it distorts the comparison?
The Witness: I understand your point, and it
would have been better if I had made an allocation by
individual. I didn’t think I could do that and sit
here and talk to you about it.
We also note that Fishman, notwithstanding his knowledge of the
fact that Emile and Louise received equal bonuses, believed that
Louise performed significantly more services for petitioner than
Emile and acknowledged that some of Louise’s duties could have
been performed by somebody else for significantly less than the
amount paid to Louise.
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