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No single factor is dispositive. Pac. Grains, Inc. v.
Commissioner, 399 F.2d 603, 606 (9th Cir. 1968), affg. T.C. Memo.
1967-7; Home Interiors & Gifts, Inc. v. Commissioner, 73 T.C.
1142, 1156 (1980).
In Pepsi-Cola Bottling Co. of Salina, Inc. v. Commissioner,
supra at 179, the Court of Appeals for the Tenth Circuit, to
which this case is appealable, listed nine factors to be
considered, with the situation as a whole being considered and no
single factor being decisive. These nine factors are: (1) The
employee’s qualifications; (2) the nature, extent, and scope of
the employee’s work; (3) the size and complexities of the
business; (4) a comparison of salaries paid with the gross income
and the net income; (5) the prevailing economic conditions; (6) a
comparison of salaries with distributions to shareholders; (7)
the prevailing rates of compensation for comparable positions in
comparable concerns; (8) the salary policy of the taxpayer as to
all employees; and (9) in the case of small corporations with a
limited number of officers, the amount of compensation paid to
the particular employee in previous years.
Petitioner contends it has established the reasonableness of
the compensation it paid to Mr. Myers and Mrs. Myers and deducted
for its fiscal year ended July 31, 1996. Respondent contends to
the contrary that petitioner has failed to establish its right to
a larger compensation deduction than respondent allowed in the
notice of deficiency.
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