CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 25

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          instead, petitioner had reported the full $2.5 million fee and              
          claimed a $2 million business deduction with respect to the                 
          portion paid to CKH.                                                        
               Alternatively, petitioner argues that if the $2 million is             
          includable in its income, then petitioner is entitled to a $2               
          million deduction for the payment to CKH.                                   
          2.  Respondent’s Arguments                                                  
               Respondent argues that the assignment of income doctrine               
          applies and that the entire $2.5 million NSI fee is includable in           
          petitioner’s taxable income for 1997.  Respondent asserts that              
          petitioner earned the $2.5 million fee.  As to the alleged fee-             
          splitting agreement, respondent maintains that Crispin’s and                
          Koehler’s testimony is self-serving and not credible.  Respondent           
          also contends that the failure to execute a contemporaneous                 
          written document memorializing a $2 million fee-splitting                   
          agreement is suspect.                                                       
               Although acknowledging that petitioner was arranging the               
          sale of the RD stock by a securities dealer like CKS, respondent            
          maintains that petitioner has failed to show that any portion of            
          its $2 million payment to CKH is deductible as a business                   
          expense.                                                                    











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