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at Quest and Norcom. Law Offices–-Richard Ashare, P.C. v.
Commissioner, supra (declining to second-guess the wisdom of the
board of directors as to the amount of compensation paid to a
principal of the taxpayer).
There was also uncontroverted testimony by disinterested
parties that immediately before and after the 1995 payment was
made, Norcom intended it to be compensation for services
rendered. Specifically, prior to making the 1995 payment,
Messrs. Arnold and Espy approached LaSalle to obtain the bank’s
approval. Loan officers at LaSalle testified that they were
informed that the payment was compensation for services
previously rendered by Quest. Notably, LaSalle did not question
whether Quest had provided services to Norcom or the amount of
the payment. Shortly after the 1995 payment was made to Quest,
petitioners’ tax adviser learned of the payment and was told by
petitioners that the entire payment was compensation for services
rendered.
Additionally, the payments to Quest were contemplated by the
revised 1994 consulting agreement.10 That agreement provides
10 Petitioners alleged that the 1994 consulting agreement
was revised, but they were unable to locate a final signed
version of the allegedly revised agreement. Petitioners did
produce a draft of the revised agreement. On brief, respondent
urged the Court to find that the 1994 agreement included the
additional clause that petitioner claimed was part of the revised
agreement. We interpret the parties’ proposed findings of fact
(continued...)
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