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SUPPLEMENTAL MEMORANDUM OPINION
MARVEL, Judge: On October 14, 2004, we received and filed,
pursuant to Rule 161,1 petitioners’ motion for reconsideration of
our Memorandum Opinion in Menard, Inc. v. Commissioner, T.C.
Memo. 2004-207 (Menard I). Petitioners’ motion for
reconsideration requests that we reconsider two parts of Menard
I:
(1) Our conclusion that John R. Menard’s (Mr. Menard)
compensation for the taxable year ended (TYE) 1998 was not paid
by Menard, Inc. (Menards), purely for Mr. Menard’s services;
(2) our ruling that part of Exhibit 17-J, summarizing the
compensation of Menards’s officers for years before TYE 1991, is
not admissible.
With respect to (1), petitioners contend that we
misinterpreted the opinion of the Court of Appeals for the
Seventh Circuit in Exacto Spring Corp. v. Commissioner, 196 F.3d
833 (7th Cir. 1999), revg. Heitz v. Commissioner, T.C. Memo.
1998-220,2 in deciding whether the compensation paid to Mr.
1All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code in effect at all relevant times.
2This case is appealable, barring a stipulation to the
contrary, to the Court of Appeals for the Seventh Circuit. We
are obligated by Golsen v. Commissioner, 54 T.C. 742 (1970),
affd. 445 F.2d 985 (10th Cir. 1971), to apply the independent
investor test articulated by the Court of Appeals in Exacto
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