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Taxable (Fiscal)
Year Ended May 31 Deficiency
1992 $898,237
1993 1,182,805
1994 1,165,619
1995 1,152,613
1996 1,048,539
1997 66,710
1998 1,251,760
1999 270,594
The deficiencies result principally from respondent’s
adjustments disallowing (1) a portion of the deductions that
petitioner claimed for the foregoing taxable years for amounts
paid as compensation to Norman Wechsler (Mr. Wechsler),
petitioner’s president and controlling shareholder and an owner
of a majority of its common stock; (2) a portion of the deduction
that petitioner claimed for its 1999 taxable year for an amount
paid as compensation to Sharon Wechsler (Mrs. Wechsler),
petitioner’s employee and corporate secretary and Mr. Wechsler’s
wife; and (3) all of the deductions that petitioner claimed for
its 1992 and 1993 taxable years for compensation paid to Gilbert
Wechsler (Gilbert), an alleged consultant to petitioner during
those years and Mr. Wechsler’s brother.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure. Many dollar amounts have been rounded to the nearest
dollar, and the term “fiscal year” will be used to refer to both
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Last modified: May 25, 2011