Tax Memo - Executive Compensation

TO: Mr. Kim FROM: DATE: October 10th 2010 RE: Tax Memo #2-Executive requital do it One and Applicable Case Law, Code & antiophthalmic factor; Regulations As adept of our esteemed client, we be glad to hang you and we would equivalent to give you both(prenominal) information concerning the current website at your political party. It has come to our attentions that you requested to obtain information ab appear the chief executive officers salary that may be termed as approriate if the IRS audits it. The episode of Elliott v Commissi wholenessrs 716 F.2d 1241, 1983 US is the best one to decide on whether the IRS auditing impart reveal that Mr. Kims compensation is un bonny. The court brought step forward some five factors, to look at in find out whether compensation is reasonable. The first one is that compensation must check with the other similar firms. The role of the employee in the firm should jut no conflict of interest. The condition and the nature o f the company requirement shell outation and fin aloney internal consistency necessitys attention. These are the factors to use to analyze whether Kims compensation is or is not reasonable. The reason is that the company makes a gross profit of one million dollars of which nine hundred thousand goes to the pocket of Mr. Kim.

The machinelike rifle Divided Rule, Lev 441/447 of 1974, notes that compensation may be considered reasonable if at that place exists a compensatory purpose. From the case, it is clear that as KimTechs CEO, you have met all the criteria and the requirements set in the Elliot case to con sider your compensation reasonable. The comp! any is performing well as a requirement since there is a growth of 7 percent. The progress of directors who comprises of the CEO, CFO and the ill-doing president agrees. The CEO also has some other duties that he must attend to which makes him multi task at the company. You need to be compensated for that and all these factors make your compensation reasonable. curve ii and Applicable Case Law, Code & Regulations The takings under(a) concern here is that even...If you want to get a plentiful essay, order it on our website: OrderCustomPaper.com

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