Owner who made $10 million per year and was qualified at 75% each year
Credible testimony presented related to his activities
“Reasonable” standard = paid under like circumstances for like activities
Expert “Compensation” testimony from the IRS and an outside consultant
Both experts compared Mr. Suder’s wages to those of other owners of like enterprises
The court allowed wages for base salary, annual incentive, and long-term incentive (~$2.5 million per year)
Main Issue:
Executive Compensation
Facts:
“Reasonable” standard = paid under like circumstances for like activities
Expert “Compensation” testimony from the IRS and an outside consultant
Both experts compared Mr. Suder’s wages to those of other owners of like enterprises
Conclusion:
The court allowed wages for base salary, annual incentive, and long-term incentive (~$2.5 million per year)
Take-Away Point:
Executives performing qualified, technological activities can substantiate their activity through contemporaneous documentation and credible testimony
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