Tax Memorandum

MEMORANDUM TO: Mr. Kim FROM: Your name DATE: December 6, 2009 RE: value Memo #2-Executive Compensation recognise # 1 1.If KimTech would be audited by the IRS for 2007, Mr. Kim would the likes of to know will his payment be deemed ordinary and what the corporation would need to show that his earnings is liable. 2.In Elliots case, the court verbalise that relevant considerations include the perspective held by the employee, duties performed, and hours worked as hygienic as the general wideness of the employee to the achievement of the fraternity pop the question signifi canistert insights into the attainment of the remuneration scheme. Comparison of the employees remuneration with those paid by exchangeable companies for similar services, companys size as predictd by sales, net income or cracking value, and whether some relationship exists between the taxpaying company and its employee are taken into account for reasonable dete rmination. Also, assure of internal discrepancy in a companys treatment of payments to employee whitethorn indicate that the payments to employees may indicate that the payments go beyond reasonable allowance. 3.Based on the Elliots case, Kim compensation is deemed reasonable because he is the sole shareholders and plays a major situation in the company.

The company has a turn up track of success with her being the chairman and sole shareholder. Kim can provide the evidence that in recent years KimTechs value hass been appreciating at 7% per year. Issue # 2 1. Kim would like KimTechs compensation to be tested using the self-directed investor/ret! urn on right approach to evaluate the reasonableness of the corporations compensation. 2.In Elliots case, A relevant inquiry is whether an inactive, separatist investor would be unbidden to compensate the employee as Elliot was compensated. The nature and role of the services should be considered, as well as the tack together of those services on the return the investor is seeing on his investment....If you exigency to get a full essay, order it on our website: OrderCustomPaper.com

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