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amount was intended as compensation for Jack’s earlier years’
services. We are not told (1) how much of the 1995 payments or
the 1996 payments was so intended; (2) how the intent was arrived
at or formulated; or (3) what earlier years’ services were being
compensated for in 1995 or in 1996. For all we can tell,
petitioner’s “theory of compensation for prior services was only
an afterthought developed at a time when the reasonableness of
the compensation was already under attack.” Pacific Grains, Inc.
v. Commissioner, 399 F.2d at 606.
Petitioner’s plea that we overlook the absence of corporate
minutes runs into the concern that it is precisely in situations
such as the instant case, where one person’s “controlling
presence was on all sides of the negotiating table” (Kean,
Transferee v. Commissioner, 91 T.C. 575, 595 (1988)), that we
“must carefully scrutinize the payments to ensure that they are
not disguised dividends.” Owensby & Kritikos, Inc. v.
Commissioner, 819 F.2d at 1324.
On the basis of Jack’s and Sledge’s testimony, as well as
petitioner’s failure to produce any relevant corporate minutes or
any other contemporaneous paper trail (see Wichita Terminal
Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946), affd.
162 F.2d 513 (10th Cir. 1947)), we conclude that it is more
likely than not that petitioner did not intend in 1995 and did
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