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We find Mr. Wechsler’s testimony self-serving and unconvincing.10
We note that petitioner offered no other evidence (e.g.,
testimony from Gilbert, petitioner’s other employees, or
potential investors) that Gilbert performed any services for
petitioner. We infer that petitioner’s failure to offer such
evidence means such evidence would have been unfavorable to
petitioner’s case. See Wichita Terminal Elevator Co. v.
Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th
Cir. 1947).
This factor supports petitioner with respect to the
compensation paid to Mr. Wechsler and respondent with respect to
the compensation paid to Mrs. Wechsler and Gilbert.
10 Mr. Wechsler acknowledged that petitioner’s 1992 and
1993 payments to Gilbert were, in unspecified part, for Gilbert’s
agreeing to the estate tax installment payment elections made by
their father’s and mother’s estates. Mr. Wechsler explained that
Gilbert (as either cofiduciary or cobeneficiary of their parents’
respective estates and the trusts established by their father)
greatly helped petitioner and Mr. Wechsler by agreeing to elect
to pay the estate taxes owed by the two estates on the
installment basis. He said that the installment tax payment
elections allowed petitioner to keep more of its capital to use
in its business, because petitioner then did not have to redeem
immediately substantially more preferred shares in order to pay
the estate taxes owed. Gilbert’s actions as a cofiduciary of the
estates in making the elections, however, do not constitute work
performed for petitioner. Petitioner does not argue that its
payments to Gilbert for his agreeing to the installment payment
elections are otherwise deductible under sec. 162 as ordinary
and necessary business expenses (other than compensation)
directly connected with or proximately resulting from
petitioner’s business. See secs. 161, 162(k), 261, 263;
Kornhauser v. United States, 276 U.S. 145, 153 (1928).
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