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NOTES 761 Tax Lawyer, Vol. 53, No. 3 NOTE PAYMENTS TO EMPLOYEES OF CLOSELY HELD CORPORATION NOT DEDUCTIBLE UNDER SECTION 162(a)(1) WHEN THEY REPRESENT DISGUISED DIVIDENDS: O.S.C. & ASSOCIATES, INC. V. COMMISSIONER In O.S.C. & Associates, Inc. v. Commissioner,1 a divided Ninth Circuit affirrme the Tax Court2 and held that payments made to shareholder-employees of a closely held corporation with the purported objective of compensation were not deductible because the payments were merely dividends...