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i.e., for each of the audit years.1 The members of the board
also met informally each week to discuss company business.
Under petitioner’s bylaws, each director has an equal vote;
no director has veto power over a decision by a majority of the
board. Nevertheless, in practice, with respect to major
decisions (e.g., approval of trash hauling contracts, major
equipment purchases, or large borrowings), the board acted by
consensus; i.e., unanimous agreement.
Duties of Officers
Mrs. Harrison
In the early years of the business, Mrs. Harrison kept
petitioner’s financial books and maintained the “route books”,
which determined the routes for the trash pickup trucks. Her
duties consisted primarily of keeping track of customers,
collecting payments, and depositing collections. After her three
sons joined the business in the early 1960s, Mrs. Harrison
continued to keep “the books”, basically keeping track of
payments and collections. She also paid certain of the bills and
attended contract negotiation meetings with Mr. Harrison.
1 We note that petitioner, an accrual basis taxpayer, would
appear to be prohibited from deducting, in any taxable year,
compensation that is not fixed or determinable until after the
close of that taxable year. See sec. 1.461-1(a)(2), Income Tax
Regs. Because respondent has not raised, as an issue, the proper
accrual of officer compensation, we do not address it.
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