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B. Comparison With Other Companies
This factor compares the employee’s compensation with that
paid by similar companies for similar services. Rapco, Inc. v.
Commissioner, supra at 954-955; Elliotts, Inc. v. Commissioner,
supra at 1246; see sec. 1.162-7(b)(3), Income Tax Regs.
The record reflects that petitioner functioned as a broker-
dealer during all the years in issue, that it had substantial
investments in micro-cap stocks as well as other securities
during those years, and that it sharply reduced its activities as
a broker-dealer in 1997 to concentrate on its own trading and
investments. We find that the parties’ experts failed to show
that their surveys identified any securities investment and
trading companies similar to petitioner whose chief executive
officers or principal managers rendered services similar to Mr.
Wechsler’s. Indeed, petitioner’s second expert, Mr. Dorf,
acknowledged that petitioner is very different from other broker-
dealers and that he could not find any broker-dealers reasonably
comparable to petitioner against whom petitioner could directly
be compared or measured. Consequently, with respect to the
reasonableness of the compensation paid by petitioner to Mr.
Wechsler, this factor is neutral. Labelgraphics, Inc. v.
Commissioner, 221 F.3d 1091, 1098 (9th Cir. 2000), affg. T.C.
Memo. 1998-343.
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