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circumstances, because such payments "may be distributions of
earnings rather than payments of compensation for services
rendered; even if they are reasonable, they would not be
deductible." Charles Schneider & Co. v. Commissioner, supra at
153 (emphasis supplied). Nevertheless, the existence of a
compensatory purpose can often be inferred if the amount of the
compensation is determined to be reasonable. See O.S.C. &
Associates, Inc. v. Commissioner, 187 F.3d 1116, 1120 (9th Cir.
1999), affg. T.C. Memo. 1997-300. For that reason, courts
generally focus on the reasonableness of the amount of the
purported compensation. See id. Courts generally do not delve
into whether a compensatory purpose exists unless there is
evidence that purported compensation payments, although
reasonable in amount, were in fact disguised dividends. See id.
"[I]f there is evidence that the payments contain disguised
dividends, the corporation must separately satisfy both the
reasonableness and the compensatory intent prongs of the test.
Reasonableness alone will not suffice." Id. at 1121.
C. Expert Witness Reports
Both parties submitted expert witness reports to establish
the amount of compensation paid to Dennis and Curtis that was
reasonable. Expert witness reports may help the Court understand
an area requiring specialized training, knowledge, or judgment.
See Snyder v. Commissioner, 93 T.C. 529, 534 (1989). We may be
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