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Heitz v. Commissioner, T.C. Memo. 1998-220. These factors
include, but are not limited to: (1) Employee qualifications;
(2) the nature, extent, and scope of the employee’s work; (3) the
size and complexity of the business; (4) prevailing general
economic conditions; (5) the employee’s compensation as a
percentage of gross and net income; (6) the employee-
shareholders’ compensation compared with distributions to
shareholders; (7) the employee-shareholders’ compensation
compared with that paid to non-shareholder-employees or paid in
prior years; (8) prevailing rates of compensation for comparable
positions in comparable concerns; and (9) comparison of
compensation paid to a particular shareholder-employee in
previous years where the corporation has a limited number of
officers.
The Court of Appeals for the Eighth Circuit has not applied
the independent investor test, but in Wagner Constr., Inc. v.
Commissioner, T.C. Memo. 2001-160, which would have been
appealable to the Court of Appeals for the Eighth Circuit, we
applied the independent investor test as a lens through which we
view each factor. See also Haffner’s Serv. Stations, Inc. v.
Commissioner, T.C. Memo. 2002-38, affd. 326 F.3d 1 (1st Cir.
2003). In general, this test questions whether an inactive,
independent investor would have been willing to pay the amount of
disputed compensation on the basis of the facts of each
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