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discussed in section II.C.4.a.(3), supra, we find that no
compensation is properly attributable to those guaranties.
Therefore, on the basis of our finding that the rest of Mrs.
Harrison’s duties were substantially similar to those of an
outside board chair who does not otherwise perform the tasks of a
chief executive or chief operating officer, we find that Mrs.
Harrison’s compensation was grossly in excess of what companies
of a comparable size pay for such services.
c. Character and Condition of the Company
“The focus under this category may be on the company’s size
as indicated by its sales, net income, or capital value. * * *
Also relevant are the complexities of the business and general
economic conditions.” Elliotts, Inc. v. Commissioner, supra at
1246. In general, petitioner appears to have been a successful,
growing company during the 1979-97 period. The problem from
petitioner’s standpoint is that Mrs. Harrison’s very limited
management role during the audit years renders this factor
(although generally favorable to petitioner) of little or no
relevance to our decision.
d. Conflict of Interest
This factor focuses on “whether some relationship exists
between the taxpaying company and its employee which might permit
the company to disguise nondeductible * * * [dividends] as salary
* * * deductible under section 162(a)(1).” Id. at 1246.
Elliotts, Inc. instructs that such a relationship “may also be
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