- 40 - 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 bePage: Previous 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 Next
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