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employee more compensation than the employer would have paid had
the employer offered the employee a pension plan or a profit-
sharing plan. Rutter v. Commissioner, supra at 1274.
Petitioner did not have a pension or profit-sharing plan.
Thus, Herold did not receive the benefit of any qualified
retirement plan contributions.
14. Reimbursement of Business Expenses
Courts have considered the reimbursement of business
expenses in determining reasonable compensation. An employer may
pay greater compensation to an employee to reflect the fact that
the employee is not being reimbursed for expenses that he or she
paid on behalf of the employer. Id.
There is no evidence that Herold incurred unreimbursed
expenses on behalf of petitioner.
Conclusion
Our analysis of the factors favors the deductibility of all
the compensation paid to Herold by petitioner. We sustain
petitioner's deductions in 1992 and in 1993 as for reasonable
compensation.
To reflect the foregoing,
Decision will be entered
for petitioner.
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