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that jurisprudence here and apply the multi factor test through
the lens of an independent investor.11
At the trial of this case, Jay Fishman, ASA, CBA (Fishman),
was called by petitioner as a witness, and the Court, with no
objection from respondent, recognized him as an expert on
reasonable compensation. Petitioner introduced into evidence
Fishman’s expert report (written under the name of his employer,
Financial Research, Inc.) as to the reasonableness of the total
compensation paid to Haff, Emile, and Louise. The report
concludes on the basis of the aggregate compensation paid to the
three individuals that “the deductions claimed by Haffner’s
Service Stations, Inc. for compensation paid to Emile and Louise
Fournier for the years ended December 31, 1990, 1991, and 1992
are reasonable deductions for compensation and not distributions
of profits.” As discussed infra, the report is premised on
Fishman’s belief that the specific compensation paid to each
officer of a corporation is reasonable when the total
compensation paid to all of the corporation’s officers is
reasonable.
Expert testimony is appropriate to help the Court understand
an area requiring specialized training, knowledge, or judgment.
11 As discussed herein, we decide this test adversely to
petitioner. Even if we had applied one of the tests argued for
by petitioner, petitioner would still not have prevailed.
Neither Emile nor Louise made a significant contribution during
the subject years to the success of petitioner’s business.
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