- 15 -
4. Payments to Employees and Contractors
Petitioners submitted exhibits with copies of canceled
checks written by Dr. Rinker to several payees in 1999. Dr.
Rinker testified that the checks represented payments from her to
several people for legal, accounting, bookkeeping, and
secretarial services rendered in connection with her medical
practice. Some of the payments were made in exchange for
secretarial and bookkeeping expenses which related directly to
Dr. Rinker’s practice at that time; others were made in exchange
for legal and business advice on a future venture proposed to Dr.
Rinker by another doctor. According to Dr. Rinker’s
uncontradicted testimony, the proposed venture never materialized
and she ceased pursuing it. In her testimony, Dr. Rinker
admitted that some of the checks in the exhibits were not for
professional services at all and were mistakenly included. In
addition, Dr. Rinker also admitted that she engaged the same
people to do her personal and business bookkeeping and
accounting.
a. Fees for Advice on the Proposed Venture
We conclude that Dr. Rinker’s payments to financial and
legal advisers were not ordinary and necessary expenses of Dr.
Rinker’s medical practice as it stood in 1999. The evidence does
not establish that the proposed venture was related to Dr.
Rinker’s current business. Petitioners are therefore not
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011