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MEMORANDUM FINDINGS OF FACT AND OPINION
CHABOT, Judge: Respondent determined deficiencies in
Federal corporate income tax against petitioner as follows:
Year Deficiency
1995 $123,602
1996 144,411
After concessions by respondent,1 the issue for decision is
the extent to which amounts that petitioner paid to Jack are
deductible as reasonable compensation under section 162(a)(1).2
1 In the notice of deficiency, respondent disallowed (1)
$338,941 of the $783,930 of officer compensation that petitioner
paid to Jack R. Brewer, Sr. (hereinafter sometimes referred to as
Jack), and Mary L. Brewer (hereinafter sometimes referred to as
Mary) in 1995, and (2) $397,759 of the $881,559 of officer
compensation that petitioner paid to Jack and Mary in 1996.
Respondent concedes that (1) all payments of officer
compensation to Mary are deductible, and (2) additional portions
of the payments to Jack are deductible. After respondent’s
concessions, there remain in dispute only $158,069 of the
original $338,941 disallowance for 1995, and only $337,593 of the
original $397,759 disallowance for 1996.
2 Unless indicated otherwise, all section references are to
sections of the Internal Revenue Code of 1986 as in effect for
the taxable years in issue.
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