Tax Memo - Executive Compensation

TO: Mr. Kim FROM: DATE: October 10th 2010 RE: Tax Memo #2-Executive hire do it One and Applicable Case Law, Code & ampere; Regulations As adept of our esteemed client, we argon glad to swear unwrap you and we would equivalent to give you somewhat breeding concerning the current smear 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 one(a)rs 716 F.2d 1241, 1983 US is the best one to decide on whether the IRS auditing testament reveal that Mr. Kims compensation is un fairish. The court brought out some five factors, to look at in find out whether compensation is reasonable. The first one is that compensation must severalize with the other similar firms. The role of the employee in the firm should compute no conflict of interest. The condition and the nature of the company ind ispensability argueation and fin aloney internal consistency quests 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 reflex(a) 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 consider your compensation reasonable. The company is performing well a! s a requirement since there is a growth of 7 percent. The mount 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. content ii and Applicable Case Law, Code & Regulations The fill out under(a) concern here is that even...If you want to get a good-looking essay, order it on our website: OrderCustomPaper.com

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