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intended, they were unreasonable in amount for the services he
rendered. Respondent argues that these excess amounts are not
deductible under section 162(a)(1).
B. Summary; Conclusions
In determining the maximum reasonable compensation for
Jack’s services for the years in issue, we have considered the
relevant factors listed in Owensby & Kritikos, Inc. v.
Commissioner, 819 F.2d 1315, 1323 (5th Cir. 1987), affg. T.C.
Memo. 1985-267. Both parties presented expert witness reports
and testimony on the applicability of the relevant factors to the
instant case. While we do not find the experts’ conclusions
4(...continued)
OPENING STATEMENT BY COUNSEL ON BEHALF OF THE
RESPONDENT
MS. CALKINS: Your Honor, this case presents two
questions: whether a portion of payments made to Mr. Brewer
in 1995 and 1996 and deducted as officer’s compensation by
the Petitioner are actually disguised dividends. * * *
The second question, respondent stated, was whether the deducted
amounts “are reasonable in amount.” The final sentence of
respondent’s opening statement is as follows:
It is Respondent’s position that in spite of Mr.
Brewer’s contributions to Petitioner during the years at
issue, the payments to him over and above what Respondent
has allowed in the trial memorandum should be disallowed as
disguised dividends.
Thirdly, our search of the transcript shows that,
notwithstanding respondent’s clear statements at the start of the
trial, petitioner did not object, or otherwise comment on this
matter, at that time or at any other time during the 3-day trial.
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