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(1933); Owensby & Kritikos, Inc. v. Commissioner, 819 F.2d 1315,
1324 (5th Cir. 1987), affg. T.C. Memo. 1985-267. Section 7491
does not apply to shift the burden in this case because the
examination of petitioner’s return commenced before July 22,
1998.
Cases traditionally set forth a lengthy list of factors that
are relevant in the determination of reasonableness, including:
(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 gross income
and net income; (5) the prevailing general economic conditions;
(6) comparison of salaries with distributions to stockholders;
(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) the amount of compensation paid to the
particular employee in previous years. Mayson Manufacturing Co.
v. Commissioner, 178 F.2d 115 (6th Cir. 1949), affg. a Memorandum
Opinion of this Court. No single factor is determinative. See
id.; Estate of Wallace v. Commissioner, supra at 553; Home
Interiors & Gifts, Inc. v. Commissioner, 73 T.C. 1142, 1156
(1980). When the case involves a closely held corporation with
the controlling shareholders setting their own level of
compensation as employees, the reasonableness of the compensation
is subject to close scrutiny. Owensby & Kritikos, Inc. v.
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