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$191,652 and $315,500 for 1996.
We do not accept certain aspects of Mr. Reilly's analysis.
Mr. Reilly's aggregation approach would result in compensation
equal to that of four full-time corporate executives. We reject
Mr. Reilly's suggestion that Dennis performed the work of four
full-time executives serving as petitioner's president and CEO,
chief financial officer, vice president of marketing and sales,
and COO. Although Dennis may have performed some of the duties
and functions of four such executives, he did not perform work
equal to the full-time services of four such executives.
Although the more roles or functions an employee performs the
more valuable his services are likely to be, an employee who
performs four jobs, each on a part-time basis, is not necessarily
worth as much to a company as four employees each working full
time at one of those jobs.
Dennis testified that he worked 80 to 90 hours per week.
Four full-time employees would have worked at least 160 combined
hours each week. It is therefore inappropriate to aggregate the
normal full-time salary for four jobs to compute the reasonable
compensation of the employee who fills all four of them. See
Pepsi-Cola Bottling Co. v. Commissioner, 61 T.C. 564, 569 (1974),
affd. 528 F.2d 176 (10th Cir. 1975); Richlands Med. Association
v. Commissioner, T.C. Memo. 1990-660, affd. without published
opinion 953 F.2d 639 (4th Cir. 1992); Ken Miller Supply, Inc. v.
Commissioner, T.C. Memo. 1978-228.
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