Tax Court Favors IRS’s Cost Markup Analysis to Compute Management Fee

BVLaw
Court Case Digests
October 16, 2017
2841 Soaps and Other Detergents, Except Speciality Cleaners
325611 Soap and Other Detergent Manufacturing
federal taxation
expert testimony, reasonable compensation, deficiency, comparable companies method, deduction

Wycoff v. Commissioner
2017 Tax Ct. Memo LEXIS 203
US
Federal Court
Federal
United States Tax Court
Francis X. Burns (taxpayers/petitioners); Ken Nunes (IRS/respondent)
Marvel

Summary

In a suit over fees paid by taxpayers’ operating companies to taxpayer-controlled management company, Tax Court says IRS expert’s cost markup analysis produces most credible arm’s-length management fee; this fee represents the allowable deduction amount.

See Also

Wycoff v. Commissioner

In a suit over fees paid by taxpayers’ operating companies to taxpayer-controlled management company, Tax Court says IRS expert’s cost markup analysis produces most credible arm’s-length management fee; this fee represents the allowable deduction amount.