The unavailability of information or records does not necessarily establish reasonable cause for failure to file timely a return.

In holding that the corporation was not entitled to a compensation deduction for the amounts paid, the Tax Court stated that "it is now settled law that only if payment is made with the intent to compensate is it deductible as compensation.... Whether such intent has been demonstrated as a factual question is to be decided on the basis of the particular facts and …

In any event, we have previously held that the unavailability of information does not constitute reasonable cause.

—this Court held that the fact that an erroneous accounting method was consistently followed and was not challenged in prior years did not foreclose respondent from correcting that erroneous treatment.

The Commissioner is authorized to change a taxpayer's method of accounting when it does not clearly reflect income.

Loans between closely held corporations and their controlling shareholders are to be examined with special scrutiny.

A payment to a shareholder/employee is compensation if:(a) The corporation intends the payment to be solely for services rendered by the shareholder/employee, and (b) the amount paid is reasonable as to the services rendered.

In analyzing whether an intent to compensate existed, we typically consider, among other factors: Whether there was corporate authorization for the payment of compensation; whether the books and records of the corporation reflected that the payments were treated as payments of compensation; whether the payments were reported to the recipients on Forms W-2 …

—the taxpayer improperly characterized capital expenditures (costs the taxpayer incurred in constructing signs with respect to which it was the lessor) as current deductions

Because Schering-Plough and its Swiss subsidiaries are related entities not acting at arms length, the Court applies "particular scrutiny because the control element suggests the opportunity to contrive a fictional [transaction]." Id