Question: Using an electronic research database such as Checkpoint, CCH Tax Research NetWork, or LexisNexis, find the case Mortex Manufacturing Co., Inc. , T.C. Memo 1994-110,
a. What is the general controversy being litigated in this case?
b. Which party—the taxpayer or the government—won the case?
c. What is the relationship between Max Deason, the founder of the business, and Carlene Deason, the vice president?
d. For the 1988 and 1989 tax years, how much salary did Carlene Deason receive from the corporation? What did the court decide was a reasonable amount of compensation for her for those years?
e. Why did the court conclude that the salary paid to Carlene Deason was excessive?
f. Was this case appealed? How did you determine your answer?
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a In general the IRS is challenging the reasonableness of compensation ... View full answer
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