Perel & Lowenstein, Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent, 237 F.2d 908 (6th Cir. 1956)

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US Court of Appeals for the Sixth Circuit - 237 F.2d 908 (6th Cir. 1956) October 23, 1956

Eichenbaum, Walther, Scott & Miller, Little Rock, Ark., for petitioner.

Charles K. Rice, John Potts Barnes, Lee A. Jackson, George F. Lynch, Vernon F. Weekley, and C. Moxley Featherstone, Washington, D. C., for respondent.

Before McALLISTER, MILLER and STEWART, Circuit Judges.


Although the petitioner corporation's president suffered a stroke resulting in paralysis and loss of the power of speech in 1949, the petitioner continued to pay him a $30,000 salary in each of the following two years, and a salary of $24,000 the third year. Deductions made by the petitioner for these payments were disallowed in their entirety by the respondent Commissioner. The Tax Court found that, "A reasonable allowance for compensation for the personal services actually rendered by Perel as well as for compensation for past services actually rendered, was not more than $10,000" for each of the years involved, and accordingly redetermined the asserted deficiencies. A careful review of the record leaves us unconvinced that this dispositive finding of fact was clearly erroneous.

The decision of the Tax Court therefore must be and is affirmed.