Tax Memorandum

MEMORANDUM TO: Mr. Kim FROM: Your name DATE: December 6, 2009 RE: Tax Memo #2-Executive Compensation fleck # 1 1.If KimTech would be audited by the IRS for 2007, Mr. Kim would standardised to know will his fee be deemed mediocre and what the lodge would need to show that his simoleons is reasonable. 2.In Elliots case, the court stated that germane(predicate) considerations include the perspective held by the employee, duties performed, and hours worked as well as the general wideness of the employee to the feat of the fraternity pass on monumental insights into the reasonableness of the remuneration scheme. equation of the employees salary with those stipendiary by exchangeable companies for analogous services, phoners size as predictd by sales, earn income or capital nurse, and whether approximately relationship exists between the taxpaying company and its employee are taken into account for reasonable determination. Also, match of internal inconsistency in a companys treatment of payments to employee may demonstrate that the payments to employees may indicate that the payments go beyond reasonable allowance. 3.Based on the Elliots case, Kim wages is deemed reasonable because he is the sole shareholders and plays a study situation in the company.

The company has a proven steer of success with her being the head and sole shareholder. Kim can provide the evidence that in recent years KimTechs value hass been appreciating at 7% per year. mercantile establishment # 2 1. Kim would like KimTechs compensation to be tested victimisation the independent investor/return on right approach to esteem the reasonableness of the corporations compensation. 2.In Elliots case, A relevant doubt is whether an inactive, independent investor would be voluntary to compensate the employee as Elliot was compensated. The genius and quality of the services should be considered, as well as the effect of those services on the return the investor is seeing on his investment....If you want to get a full essay, order it on our website: Ordercustompaper.com

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