- 50 - FYE Amount 6/30/89 $1,307,000 6/30/90 3,538,000 6/30/91 1,153,000 6/30/92 1,032,000 Total 7,030,000 Dr. Frisch used a profit-split analysis and a comparison with industry averages to test the reasonableness of his conclusions. He stated that the two reasonableness tests confirmed that applying the otros growers' commission rate, with adjustments, to petitioner's related-party transactions would result in petitioner's earning appropriate levels of income during 1989 through 1992. Further, he stated, those tests indicate that petitioner's income levels as reported on its tax returns for the years in issue were not consistent with arm's- length behavior. Therefore, Dr. Frisch concluded that it was necessary to adjust petitioner's commissions in order to make them consistent with the arm's-length standard. Respondent also submitted the expert report of Enrique E. Figueroa (Dr. Figueroa). He has a Ph.D. in agricultural economics from the University of California-Davis and is employed as a research associate for the Department of Agricultural, Resource and Managerial Economics at Cornell University. Dr. Figueroa provided general background information on the produce industry.Page: Previous 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 Next
Last modified: May 25, 2011