Charles McCandless Tile Service v. The United States

OPINION *

LARAMORE, Judge.

This is an action to recover Federal income taxes paid by plaintiff for the fiscal years ended June 30, 1963, 1964 and 1965. The issue presented involves the extent to which amounts paid by plaintiff during the years in question to its two principal officer-stockholders are deductible for tax purposes as reasonable compensation. The relevant facts, set forth at length in succeeding findings, are recited here in summary fashion.

Plaintiff, Charles McCandless Tile Service, is a corporation organized, existing, and doing business under the laws of the State of California.…