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included locations in the States of Tennessee, Kentucky,
Arkansas, and Mississippi. Moreover, approximately 30 percent of
the increase in client locations occurred from 1989 to 1990.
Finally, the home health care visits managed by petitioner in
1990 almost doubled from the 500,000 managed in 1989. Thus,
petitioner's business dramatically increased in 1990 compared to
1989.
Petitioner is in a complex business. The management of the
home health care business requires special expertise with regard
to Medicare, Medicaid, insurance requirements, and State health
care licensing regulations. In addition to technical expertise,
compliance with the various insurance programs requires accurate
documentation of each home visit. Petitioner managed the
documentation and reporting of almost a million home health care
visits in 1990. The documentation and reporting of these visits
included both clinical information and claims information which
were processed through the Alpha Information System that was
designed in part by Rogers and Worley and implemented by Rogers.
This factor favors petitioner.
4. Comparison of Salaries Paid to Gross and Net Income
In 1990, Rogers' compensation was 44.9 percent of
petitioner's gross receipts and 64.6 percent of its net taxable
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