Sunbelt Clothing Company, Inc., f.k.a. Unprinted T-Shirt Warehouse, Inc. - Page 23

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          Commissioner, 102 T.C. 149, 186 (1994); Parker v. Commissioner,             
          86 T.C. 547, 562 (1986).                                                    
               Respondent presented the reports and testimony of Francis X.           
          Burns of the IPC Group, LLC. (IPC).  Mr. Burns and IPC specialize           
          in valuing intellectual property and intangible assets and in               
          transfer pricing issues.                                                    
               Mr. Burns chose 11 "peer group" companies and then compared            
          the net sales, average gross margin, and number of employees of             
          those 11 "peer group" companies to petitioner.  After determining           
          that Mr. Bennett's position most resembled a chief executive                
          officer (CEO) and that Mr. Sokol's position most resembled a                
          chief operating officer (COO), Mr. Burns then compared the CEO's            
          and COO's of his "peer group" to Messrs. Bennett and Sokol.  The            
          criteria Mr. Burns used to compare Messrs. Bennett and Sokol to             
          his "peer group" were limited, however, to age, number of years             
          of industry experience, and various positions held by the                   
          executives.  At trial, Mr. Burns testified that he did not                  
          specifically consider whether Messrs. Bennett or Sokol had duties           
          more expansive than the traditional CEO and COO, nor did he                 
          consider the relative values of each executive to petitioner.               
          Mr. Burns concluded that a reasonable compensation for Mr.                  
          Bennett would be the average of the interquartile range6 of the             

               6The interquartile range is the range of values encompassing           
          the middle 50 percent of a sample group.                                    

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