- 36 -
Until we know that, we do not know how to deal with the concern
that Hakala has described.
Thirdly, Hakala does not: (a) Point to any evidence that
would enable us to quantify the amount, if any, by which this
potential gamesmanship actually diminished the compensation that
petitioner paid to Jack in any year, (b) suggest any way of
adjusting the ratio for petitioner to compensate for this
potential gamesmanship, or (c) explain why petitioner and Jack
would shift payments from compensation in 1993 but not use that
device for 1989, 1990, and 1991, when presumably the same
“incentives” were in play and when petitioner and Jack had the
same tax adviser that they had in 1993.
Thus, Hakala’s speculation is interesting but we do not find
it helpful in analyzing the instant issue. See infra (3)
Previous Underpayment.
Hakala also presents the following double-barreled attack on
Ding’s reliance on the RMA data:
The Robert Morris Associates (“RMA”) data requires more
analysis than was provided by Ms. Ding. First, we don’t
know exactly how many officers, directors and affiliates are
represented in the total officers’ compensation in the RMA
figures. For larger dealerships, our experience is that
more than one officer is included and sometimes three or
more persons may be represented in the total figures.
Second, we don’t know the extent to which the officers’
compensation is consistent with arm’s length practices. The
BVS Report summarized in Exhibits II-2 and II-3 [attachments
to Exh. 60-R, Hakala’s expert witness report] represents an
attempt to address these issues. The suggested total
compensation at the 75th percentile level is at most
$324,219 in 1995 and $224,858 in 1996 for a single officer
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