- 7 - D. Petitioner’s Employee Compensation The compensation petitioner paid Mr. Reeves each year from 1982 through 1996 was:7 FYE June 30 Compensation 1982 $15,707 1983 16,100 1984 26,000 1985 42,000 1986 47,000 (includes $18,240 bonus) 1987 11,000 1988 -0- 1989 22,444 1990 4,000 1991 -0- 1992 -0- 1993 310,000 1994 182,300 1995 2,278,000 (includes $2 million bonus) 1996 1,012,000 (includes $1 million bonus) From FY 1982 through FY 1992, Mr. Reeves’s salary remained low or he was unpaid so that profits could be invested to expand petitioner’s business. Beginning in FYE June 30, 1993, petitioner’s business improved, and profits substantially increased. Petitioner deducted the compensation paid to Mr. Reeves as officer compensation on its Forms 1120, U.S. Corporation Income Tax Return, in the fiscal years at issue. In FYE June 30, 1995, petitioner paid $374,884 in salary and wages to its employees including $95,000 in bonuses, and in FYE June 30, 1996, petitioner paid $348,837 in salary and wages to 7 The table does not include amounts UMI or CTC paid to Mr. Reeves.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: November 10, 2007