Alicia Ruth, Inc. v. Commissioner of Internal Revenue

Fifth Circuit

Alicia Ruth, Inc. v. Commissioner of Internal Revenue

421 F.2d 1393

Court of Appeals for the Fifth Circuit·Decided January 19, 1970·No. 28168·Published·Cited by 2 cases

Opinion

PER CURIAM:

The corporate taxpayer appeals from a decision of the Tax Court (memoranda opinion 28 T.C. M 262) disallowing as a deduction the amounts paid as alleged compensation to a fifty percent stockholder. As all of the witnesses were interested financially in the outcome of the case and there were many circumstances, doubts and uncertainties about the arrangement under which the stockholder claimed he was serving the corporation by steering customers into this Miami Beach ladies shop, the trier of fact was entitled to conclude that the amount disbursed was not compensation. Consequently, disallowing it altogether was not error. Thus no employment relationship was established.

Affirmed.

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PER CURIAM:

The corporate taxpayer appeals from a decision of the Tax Court (memoranda opinion 28 T.C. M 262) disallowing as a deduction the amounts paid as alleged compensation to a fifty percent stockholder. As all of the witnesses were interested financially in the outcome of the case and there were many circumstances, doubts and uncertainties about the arrangement under which the stockholder claimed he was serving the corporation by steering customers into this Miami Beach ladies shop, the trier of fact was entitled to conclude that the amount disbursed was not compensation. Consequently, disallowing it altogether was not error. Thus no employment relationship was established.

Affirmed.

Alicia Ruth, Inc. v. Commissioner of Internal Revenue, 421 F.2d 1393 (5th Cir. 1970).

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Opinion

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