- 99 -
is a question of fact. Founding Church of Scientology v. United
States, 188 Ct. Cl. 490, 412 F.2d 1197, 1200 (1969). Factors
similar to those considered in determining reasonable
compensation under section 162(a)(1) are examined. Founding
Church of Scientology v. United States, supra; B.H.W. Anesthesia
Foundation v. Commissioner, 72 T.C. 681, 686 (1979). In
determining whether there has been an inurement of net earnings
we are to consider all forms of compensation, and not merely
direct payments from the organization to the insider. Founding
Church of Scientology v. United States, supra; Unitary Mission
Church v. Commissioner, 74 T.C. at 512-513.
A cap or limit on the contingent compensation that may be
earned under a particular incentive formula, can be considered a
factor supporting the reasonableness of that contingent
compensation arrangement. See People of God Community v.
Commissioner, 75 T.C. at 132.
At trial, petitioner and respondent offered the testimony of
several expert witnesses on the issue of whether W&H received
more than reasonable compensation. As trier of fact, we are not
bound by the opinion of any expert witness and will accept or
reject expert testimony, in whole or in part, in the exercise of
sound judgment. Helvering v. Nat. Grocery Co., 304 U.S. 282, 295
(1938); Silverman v. Commissioner, 538 F.2d 927, 933 (2d Cir.
1976), and cases there cited, affg. T.C. Memo 1974-285.
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