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success was directly correlated with completing jobs within
budget. As supervisors with about 20 years of experience each,
Rocky and Dean made sure each job was completed in an efficient,
cost-effective manner. Their knowledge and experience warranted
high compensation for their services for each year in issue.
This factor favors petitioner.
B. Nature, Extent, and Scope of an Employee’s Work
An employee’s position, duties performed, hours worked, and
general importance to the corporation’s success may justify high
compensation. See Charles Schneider & Co. v. Commissioner, supra
at 152.
1. Darle
Petitioner argues that Darle was a key employee. Mr.
Herber, respondent’s expert, similarly opined that Darle was the
key employee of petitioner. Petitioner’s business model was to
maintain consistent yearly sales. Petitioner’s success depended
on two things: (1) Accurately estimating the cost of completing
a job, and (2) completing the job within budget. Darle was the
sole individual responsible for preparing these bids. In
addition to performing his duties as petitioner’s CEO, Darle
performed many other tasks. Darle also testified that he worked
about 50 hours per week during the years in issue. We believe
that Darle’s 20 years of experience were irreplaceable to
petitioner. Therefore, we find that the nature, extent, and
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