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functions * * * [and at] the different sponsorship events that we
do”, acknowledged that petitioner’s success derived from its
ability to provide good service at a reasonable price.
The testimony of those public officials responsible for
awarding the trash hauling contracts demonstrates that
petitioner’s success in obtaining those contracts was based upon
its ability to carry out those contracts in a satisfactory manner
and at a reasonable price; i.e., the awards were based upon
performance, not reputation for community involvement. Thus,
although petitioner has shown that Mrs. Harrison was instrumental
in helping petitioner project a positive corporate image in the
communities it served, petitioner has not shown that Mrs.
Harrison’s public relations activities contributed directly to
its sales and profits.
(3) Personal Guaranties
Courts, including this Court, have developed a series of
factors for deciding the deductibility of guaranty fees paid to a
shareholder employee: (1) Whether, given the financial risks,
the fees are reasonable in amount; (2) whether businesses of the
same type and size as the payor must customarily pay guarantor
fees to shareholders; (3) whether the shareholder demanded
compensation for the guaranty; (4) whether the payor had
sufficient profits to pay a dividend, but failed to do so; and
(5) whether the purported guaranty fees were proportional to
stock ownership. See Olton Feed Yard, Inc. v. United States, 592
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