Reasonable Compensation Does Not Consider CEO’s Role in Related Businesses

Business Valuation UpdateVol. 13 No. 12
Legal and Court Case Update
December 2007
7311 Advertising Agencies
541810 Advertising Agencies
federal taxation

Universal Marketing, Inc. v. Commissioner
2007 Tax Ct. Memo LEXIS 308
October 9, 2007
US
Federal Court
United States Tax Court
Wesley F. McNamara
Scott Hakala (IRS)
Haines

Summary

Tax Court disallows $500,000 bonus to CEO of startup as reasonable compensation, despite company enjoying a 42% return on equity.

See Also

Universal Marketing, Inc. v. Commissioner

Tax Court disallows $500,000 bonus to CEO of start-up as reasonable compensation, despite company enjoying a 42% return on equity.