POSNER, Circuit Judge.
A corporation can deduct from its taxable income a "reasonable allowance for salaries or other compensation for personal services actually rendered." 26 U.S.C. § 162(a)(1); see Treas. Reg. §§ 1.162-7, 1.162-9. But it cannot deduct dividends. They are not an expense, but a distribution to shareholders of corporate income after the corporation has paid corporate income tax. Thus a corporation that can get away with pretending that...
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