Home Interiors & Gifts, Inc. v. Commissioner
United States Tax Court
From 1971 through 1975, X, Y, and Z received very substantial compensation from C consisting of salaries, bonuses, and commissions based on a percentage of the sales of C. X and Y, who were related, owned, with their families, slightly more than 50 percent of the stock of C; Z, who was not related to X and Y, owned a negligible amount of stock.
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From 1971 through 1975, X, Y, and Z received very substantial compensation from C consisting of salaries, bonuses, and commissions based on a percentage of the sales of C. X and Y, who were related, owned, with their families, slightly more than 50 percent of the stock of C; Z, who was not related to X and Y, owned a negligible amount of stock. From 1971 thorugh 1975, C enjoyed extraordinary success in sales and profits; it paid high dividends, and the value of its stock increased sharply. Held, under all the circumstances, the compensation of X, Y, and Z during such years was reasonable…
1Opinion of the Court
Simpson, Judge:
The Commissioner determined the following deficiencies in the petitioners’ Federal income taxes:
Home Interiors Year & Gifts, Inc. David M. and Mary C. Crowley Donald J. and Linda J. Carter
1971 $365,971.00
1972 679,650.22
1973 920,490.00
1974 1,269,506.00 $176,555 $135,399.72
1975 1,021,321.00 127,951 137,980.08
The only issue to be decided is whether the amounts paid by Home Interiors & Gifts, Inc., to three of its officers, constituted reasonable compensation for services rendered within the meaning of section 162(a)(1) of the Internal Revenue Code of 1954.2
FINDINGS OF FACT
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2Cases cited20 opinions
- Botany Worsted Mills v. United StatesSupreme Court of the United States · 1929
- Mayson Mfg. Co. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1949
- Logan Lumber Company v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1966
- Pacific Grains, Inc., an Oregon Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1968
- Charles Schneider & Co. v. CommissionerCourt of Appeals for the Eighth Circuit · 1974
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3Cited by80 opinions
- Owensby & Kritikos, Inc. v. CommissionerCourt of Appeals for the Fifth Circuit · 1987
- Estate of Wallace v. CommissionerUnited States Tax Court · 1990
- James D. Kennedy, Jr. And Dorothy H. Kennedy, and Cherokee Warehouses, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1982
- Thomas v. CommissionerUnited States Tax Court · 1989
- Rotolo v. CommissionerUnited States Tax Court · 1987
75 more not listed; retrieve them via the Exa API.