34
The cases contain lengthy lists of factors that bear on the
determination of reasonableness. The Court of Appeals for the
Ninth Circuit, to which appeal in these cases would lie, uses the
five-factor test of Elliotts, Inc. v. Commissioner, 716 F.2d
1241, 1245-1248 (9th Cir. 1983), revg. and remanding T.C. Memo.
1980-282. These five factors are: (a) Role in company; (b)
external comparison; (c) character and condition of company; (d)
conflict of interest; and (e) internal consistency. Id.; L & B
Pipe & Supply Co. v. Commissioner, T.C. Memo. 1994-187; Curtis v.
Commissioner, T.C. Memo. 1994-15. No single factor is
controlling. Pacific Grains, Inc. v. Commissioner, 399 F.2d 603,
606 (9th Cir. 1968), affg. T.C. Memo. 1967-7.
(a) Role in Company
Relevant considerations include the position held by the
employee, hours worked, duties performed, and the general
importance of the employee to the success of the enterprise. If
the employee has received a large salary increase, it may be
helpful to compare past and present duties and salary payments.
Elliotts, Inc. v. Commissioner, supra at 1245. Even though
respondent now disputes that Mr. Munro was chief executive
officer of petitioners, including Pertinax, both parties have
treated him as such, and the record is replete with evidence that
he was ultimately responsible for petitioners' policy decisions.
Although Mr. Munro had been responsible for obtaining favorable
terms with suppliers in prior years, nothing in the record
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