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that must be resolved on the basis of all credible evidence in
the record. See Pac. Grains, Inc. v. Commissioner, 399 F.2d at
605. Here, Beiner was vital and indispensable to petitioner’s
success and performed for petitioner services which were directly
and inextricably tied to petitioner’s profitability. In
addition, from the view of a hypothetical inactive independent
investor, the returns on equity after taking into account the
disputed compensation payments were meaningful.
We conclude that a hypothetical inactive independent
investor would consider this factor favorably to require the
payment of the disputed compensation to Beiner in order to retain
his services during each of the subject years.
5. Internal Comparison
Evidence of internal inconsistency in a company’s treatment
of payments to its employees may indicate the presence of
unreasonable compensation. Elliotts, Inc. v. Commissioner, supra
at 1247.
Respondent argues that the compensation that petitioner paid
to Beiner vis-a-vis its nonowner/officer Caldwell and to Beiner
vis-a-vis all of its employees shows that Beiner’s compensation
was unreasonable. We disagree. As previously stated, we believe
that a hypothetical inactive independent investor would view
Beiner’s compensation during 1999 and 2000 as reasonable. The
fact that petitioner paid Beiner compensation that was much
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