Opinion

Whittelsey, Inc. v. Commissioner

  • 9 T.C. 700
  • 1947 U.S. Tax Ct. LEXIS 66
Court
United States Tax Court
Filed
Oct 15, 1947
Status
Published
Author
Disney
On the bench
Disney
Cited by
7 cases

The opinion

Disney, J., dissenting: Findings of fact in this case disclose that wages, including overtime, plus compensation for officers, totaled approximately $354,000, of which only about $39,000 was compensation for officers. H. Newton Whittelsey was president. To his efforts and ability the majority opinion, in effect, primarily ascribes the earnings of the corporation, and therefore concludes that it is a personal service corporation. I note, however, that the three department chiefs, the three division heads, and the seven squad leaders included employees who were paid approximately $61,000, as against about $39,000 to the officers, including Whittelsey. It therefore appears that the corporation considered its officers to be earning much less than the leaders of its employees. The $39,000 is about 11 per cent of the $354,000 paid employees and officers. It is impossible for me, in the light of these figures, reflecting the attitude of the corporation in valuing the services of its officers, including Whittel-sey, to conclude that the corporate income is “to be ascribed primarily to the activities of its principal stockholder,” Whittelsey. The record does not show the amount of compensation paid to him alone, but, assuming that it is far the larger portion of the $39,000 paid to all officers, it still is a very small percentage of the total amount paid to employees. The attitude of the corporation, thus definitely proved towards compensation of its president and other officers, it seems to me, is a better indication of the importance of his activities'than the record otherwise shows. I think the importance of employees is not to be so minimized as the majority opinion holds. This is not a case, therefore, where I believe there is a personal service corporation. I therefore dissent.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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