- 25 - 9. Petitioner's Compensation Policy for All Employees Courts have considered the taxpayer's compensation policy for other employees of the business in deciding whether compensation is reasonable. Mayson Manufacturing Co. v. Commissioner, 178 F.2d at 119; Home Interiors & Gifts, Inc. v. Commissioner, 73 T.C. at 1159. This factor focuses on whether the entity pays top dollar to all of its employees, including both shareholders and nonshareholders. Owensby & Kritikos, Inc. v. Commissioner, supra at 1329-1330. Petitioner paid Choate at the high end of the compensation range. Petitioner points out that its project managers and superintendents often make more from bonuses (which are based on performance) than they do from salaries, but petitioner presented no evidence that its other employees were paid at or near the high end of the compensation range. Cf. Home Interiors & Gifts, Inc. v. Commissioner, supra at 1159-1160. This factor favors respondent.Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Next
Last modified: May 25, 2011