In response to our item last week on the use of data sources in reasonable compensation cases, we heard from Robin Ruegg, an Engineering Manager for the IRS in Bloomington, MN. Ruegg points out that in her opinion, salary surveys are “always a problem to some extent,” as “you want the data to match as closely as possible with the facts in the case.” Ultimately, “you’d hope the surveys validate other approaches to compensation.” Ruegg references a recent S Corporation “under-compensation” case, in which the judge adopted the conclusions advanced by the IRS expert. For a copy of J.D. & Associates v. United States (U.S. District Court, Southeastern District of N.D., June 2006), click here.
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