Lakewood Manufacturing Company v. Commissioner of Internal Revenue

KENT, Circuit Judge.

This is an appeal by the Taxpayer from an adverse decision by the Tax Court. 1 The Taxpayer is a corporation, the stock of which is held by Stephen Peplin and the members of his family. The Taxpayer contests deficiencies in corporate income tax found by the Commissioner resulting from the Commissioner’s determination that for the tax years ending May 31, 1962 through May 31, 1967, the salary deducted by the Taxpayer for compensation paid to Stephen Peplin as president was unreasonably high.

Effective June 1, 1959, Stephen Pep-lin was paid $60,000 as President of the…