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Petitioner did not have a pension plan; thus, the Officers
did not receive the benefit of any pension contributions. This
factor favors petitioner.
o. Reimbursement of Business Expenses
Courts have considered the reimbursement of business expenses
in determining reasonable compensation. An employer may pay
greater compensation to an employee to reflect the fact that the
employee is not being reimbursed for expenses that he or she paid
on behalf of the employer. Id.
The Officers were reimbursed for their out-of-pocket expenses
incurred on behalf of petitioner. The record, however, does not
disclose the exact amount of these expenses. Moreover, it does
not appear that any of those expenses were incurred with other
than a corporate benefit in mind. This factor favors neither
party. We consider it neutral.
p. Conclusion on Reasonableness
Most of the factors described above favor petitioner, and
none of them favor respondent. We conclude that the $1,461,000
paid to Mr. Laviano in 1985 was reasonable compensation for that
year. We conclude likewise with respect to the $1,461,000 paid
to Mr. Woll in 1985.
2. Whether Compensation Was Paid for Services Rendered to
Petitioner
According to respondent, petitioner is not entitled to deduct
all of the compensation paid to the Officers because it paid part
of this compensation for services that they performed on account
of other, related companies. We disagree. Although the Officers
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