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Commissioner, 95 T.C. 525, 553 (1990), affd. 965 F.2d 1038 (11th
Cir. 1992). Case law has provided an extensive list of factors
that bear on the determination of reasonableness. Mayson
Manufacturing Co. v. Commissioner, 178 F.2d 115, 119 (6th Cir.
1949), affg. a Memorandum Opinion of this Court. No single
factor is determinative. Id. In Edwin's, Inc. v. United States,
501 F.2d 675, 677 (7th Cir. 1974), the Court of Appeals for the
Seventh Circuit, to which this case is appealable, divided these
factors into seven categories: (1) The type and extent of the
services rendered; (2) the scarcity of qualified employees; (3)
the qualifications and prior earning capacity of the employee;
(4) the contributions of the employee to the business venture;
(5) the net earnings of the employer; (6) the prevailing
compensation paid to employees with comparable jobs; and (7) the
peculiar characteristics of the employer's business. For any
given position, there will be a range, not unduly narrow, of
compensation that could properly be considered “reasonable”. Id.
A. Type and Extent of Services
The first category of factors identified by the Court of
Appeals concerns the type and extent of the employee's services
for the company. Relevant factors include the employee's
position, hours worked, and duties performed. Home Interiors &
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