Charles McCandless Tile Service v. United States

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. Its business is that of ceramic tile contracting, and its primary area of activity is southern California. Plaintiff’s present business is the…