Best Practices for Reasonableness of Employee Compensation Analysis

(Part I of III)

This article about excess compensation is comprised of three-parts. Part one summarizes the facts regarding Clary Hood, Inc. v. Commissioner and the U.S. Tax Court’s holding. Part two of this series describes the Tax Court’s analysis and conclusions regarding the reasonableness of compensation issues. Part three describes the Tax Court’s analysis and conclusions regarding Section 6662 penalty issues.

Introduction

There are many reasons why valuation analysts and other professional advisers are asked to analyze—and opine on—the reasonableness of the amount of compensation paid to the employees of a private company or institution.

Assessing the reasonableness of executive/shareholder compensation is a generally accepted due diligence procedure in the development of a private company business valuation prepared for many purposes. Valuation analysts typically “normalize” the private company’s historical results of operations for amounts paid to employee/owners that are more than what would be considered reasonable compensation for the actual services provided to the company.

Assessing the reasonableness of employee compensation (including nonshareholder employees) is important for (1) a private company owned by an employee stock ownership plan (ESOP) or (2) a not-for-profit organization. Excessive executive compensation payments may be considered unfair to the ESOP participants and may decrease the fair market value of the ESOP-owned sponsor company. The ESOP participants, the ESOP trustee, or the U.S. Department of Labor may question the reasonableness of compensation period to the ESOP sponsor company executives.

Not-for-profit organizations (whether in the health care, education, research, or other industries) may not pay more than a fair market level of compensation to executives or professionals. The Internal Revenue Service (the “Service”), other federal regulatory agencies, or the state attorney general in the relevant state may question any alleged excess compensation paid to be not-for-profit entity’s executives or professionals.

Assessing the reasonableness of executive/shareholder compensation is an important due diligence procedure when a noncontrolling shareholder is claiming to have suffered damages as the result of the actions of the company’s board of directors or the company’s controlling shareholder. Such a damages claim may relate to either (1) shareholder oppression and breach of fiduciary duty litigation or (2) dissenting shareholder appraisal rights litigation.

And, assessing the reasonableness of executive/shareholder compensation may be particularly important in income tax disputes between the closely held company and the Service. In fact, private company owners, their legal and other tax advisers, and valuation analysts often look to income-tax-related judicial decisions for guidance related to reasonableness of compensation issues. The U.S. Tax Court recently provided such judicial guidance in the matter of Clary Hood, Inc. v. Commissioner.

Part one of this three-part series summarizes the facts regarding the subject taxpayer company and the subject tax litigation. Part two describes the Tax Court’s analysis and conclusions regarding the reasonableness of compensation issues. And, part three describes the Tax Court’s analysis and conclusions regarding the Section 6662 penalty issues.

Clary Hood, Inc. v. Commissioner of Internal Revenue

The U.S. Tax Court matter Clary Hood, Inc. v. Commissioner of Internal Revenue involved a dispute between the Service and a private C corporation taxpayer, Clary Hood, Inc. (“CHI”), regarding the reasonableness of executive compensation paid to chief executive officer/shareholder, Clary R. Hood (“Hood”). The Tax Court published its decision in T.C. Memo 2022-15 (“the Hood decision”).

The Hood decision is generally favorable to the Service, concluding that the taxpayer CHI (1) owed back income taxes for both tax years in dispute and (2) owed an Internal Revenue Code Section 6662 substantial understatement penalty for one of the tax years in dispute.

Important to private company owners and to their professional advisers, the Hood decision provides a thorough analysis of the so-called “multifactor approach to assessing the reasonableness of employee compensation. In addition, the Hood decision provides a frank discussion of what the Tax Court found persuasive—and unpersuasive—about the quantitative analyses, the expert reports, and the trial testimony of the various testifying experts in this case.

Summary of the Hood Decision

Upon audit, the Service determined deficiencies in, and Section 6662 accuracy-related penalties with respect to, the CHI federal income tax returns for the tax (fiscal) years ending May 31, 2015 and 2016 (collectively, the tax years at issue). Exhibit 1 summarizes the conclusion of the Service’s audit of CHI for fiscal years 2015 and 2016.

Exhibit 1: Clary Hood, Inc.

Internal Revenue Service Audit

Summary of Results

Fiscal Year	Income Tax Deficiency Concluded	Section 6662 Substantial Understatement Penalty
2015	$1,581,202	$316,240
2016	$1,613,308	$322,662

Although it is only a memorandum decision, the Hood decision presents a detailed description of the decision-making process followed by Tax Court Judge Greaves. The Hood decision provides a thorough discussion of the factors that the Tax Court considered in assessing the reasonableness of executive/shareholder compensation for this closely held C corporation. The decision explains the legal rationale for the court’s reliance on the multifactor approach. And, the decision explains the court’s analysis of each factor within that multifactor approach.

Therefore, the March 2, 2022, Hood decision provides recent and meaningful practical guidance regarding reasonableness of executive compensation tax deduction analyses. This judicial decision provides such practical guidance to private company business owners, to tax counsel, to tax accountants, to compensation consultants, and to valuation and other analysts who advise private companies regarding reasonableness of executive/shareholder compensation issues.

Following the trial, the issues to be decided by the Tax Court were (1) the amount that CHI could deduct under Section 162(a)(1) as reasonable compensation paid to its chief executive officer/shareholder, Clary L. Hood, during the tax years at issue and (2) whether CHI was liable for the substantial understatement accuracy-related penalties under Section 6662(a) and (b)(2) for the tax years at issue.

For the reasons summarized in the following discussion (and comprehensively described in the Hood decision), the Tax Court held that (1) CHI was entitled to deduct no more than $3,681,269 and $1,362,831 for the 2015 and 2016 tax years, respectively, and (2) CHI was liable for the Section 6662 substantial understatement penalty for the 2016 tax year (but not for the 2015 tax year).

The Hood Decision Findings of Fact

The following discussion summarizes the CHI business operations, the responsibilities of Hood as a CHI employee, and the compensation amounts paid by CHI to Hood. Most of these facts were stipulated to at trial by both the taxpayer and the Service.

Clary Hood as the Company Founder and CEO

Judge Greaves made the following important observation in the Hood decision: “To understand Clary Hood, Inc., one must first know Mr. Hood.”

Before the years at issue in this tax dispute, Hood had dedicated his entire career to the construction industry, specializing in the construction industry segments of land grading and excavation. Hood learned the industry as a boy from his father, J.E. Hood. J.E. Hood operated his own land grading business. Upon graduation from high school in 1967, Hood joined his father’s company in the land grading industry segment.

In 1980, Hood founded CHI with his wife, Gail. Together they served as the CHI sole shareholders and sole members of the company board of directors. Hood exercised ultimate decision-making control over all of the CHI operations, from the company’s founding up through the tax years at issue.

CHI Business History and Operations

Generally acting as a subcontractor, CHI concentrated on land grading and excavation services for construction projects in the South Carolina region. CHI started with two employees and a collection of used earth-moving equipment valued at less than $60,000. CHI developed into a 150-person company with nearly $70 million in revenue by the end of its 2016 fiscal year.

For the period of 2000 to 2010, the CHI revenue growth was slow and the company profits were cyclical. During that period, CHI generated less than $1 million in net income after taxes in most years. Like many construction companies in the late 2000s, CHI experienced financial distress during the “Great Recession” and sustained three years of operating losses during its fiscal years ending May 31, 2009 to 2011.

During those years, CHI survived due to its reputation and due to the following strategic decisions over which Hood exercised primary, if not exclusive, control: (1) conserving cash by maintaining a low debt profile and not declaring dividends; (2) temporarily reducing employee pay; (3) withholding Hood’s salary, when necessary, to ensure that sufficient funds were available to cover the company payroll needs; and (4) selling $800,000 of equipment to offset losses and to supplement cash reserves.

Based on Hood’s executive decision, CHI changed strategic direction in 2012. CHI shifted away from one of the company’s largest and most consistent sources of revenue: site grading work for Walmart shopping centers (“Walmart projects”). Between 1999 and 2011, Walmart project revenue generally accounted for more than 20 percent of the CHI annual revenue.

While CHI initially welcomed this steady stream of revenue, the Walmart projects created constraints on the CHI resources for timely job completion. These constraints reduced the CHI ability to pursue more lucrative grading jobs. It became apparent to Hood that the grading company needed to shift away from Walmart projects. In 2011, without seeking input from any other company executives, Hood notified the Walmart developer’s representative that CHI would not engage in any future Walmart projects. Ultimately, this risky management decision would prove very beneficial for CHI.

In July 2011, CHI began diversifying its customer base by transitioning from retail-related grading work to commercial and industrial grading projects. As a result of Hood’s personal efforts, CHI landed on the bid list for a sizable potential project with a zinc recycling plant in North Carolina. CHI won that project bid. Over the next several years, that project evolved into the largest and most profitable job in the company’s history, bringing in over $30 million of revenue and a gross profit margin above 40 percent.

Also in 2011, one of Hood’s industry contacts enabled CHI to bid on—and win—another large grading project with one of Bridgestone’s plants in Aiken, South Carolina. That project accounted for nearly $9.5 million of CHI revenue over the next few years, with the company earning an overall gross profit margin of 41 percent. Around 2014, Hood’s efforts secured another large grading job, a project for the Tryon Equestrian Center. By the end of the 2016 fiscal year, that project generated over $23 million in revenue and $5.4 million gross profit for the grading company.

The CHI revenue growth and financial performance improved materially after its transition away from the Walmart projects. The CHI financial performance improvement is summarized in the Exhibit 2 financial data for the CHI fiscal years ending May 31, 2000 to 2016 (the “review period”).

Exhibit 2: Clary Hood, Inc.

Summary of Results of Operations

Fiscal Years Ending May 31, 2000 through 2016

	Fiscal Year-End	Company Revenue ($)	Company Gross Income (Loss) ($)	Net Income (Loss) before Taxes ($)	Year-End Shareholders’ Equity ($)	Year-End Cash on Hand ($)
	2016	68,834,166	22,090,576	14,537,867	31,262,166	15,482,871
	2015	44,111,646	13,879,822	7,088,529	21,742,422	10,059,619
	2014	34,074,836	10,008,003	8,271,261	17,419,060	9,434,712
	2013	42,830,999	11,755,042	7,427,560	11,965,811	5,024,051
	2012	23,680,476	3,738,212	2,308,710	7,112,009	1,172,793
	2011	15,575,546	1,072,062	(120,530)	5,478,422	1,234,290
	2010	20,605,072	130,997	(589,730)	5,550,877	1,342,332
	2009	27,757,113	1,023,856	(390,922)	5,910,615	923,853
	2008	38,439,625	5,116,648	2,864,533	6,186,310	1,170,632
	2007	25,898,118	3,099,005	1,294,923	4,366,759	647,649
	2006	14,936,476	1,615,374	125,617	3,554,653	657,222
	2005	22,150,933	2,157,518	981,456	3,476,981	140,955
	2004	13,243,547	1,826,002	874,588	2,858,337	293,333
	2003	9,332,724	(97,393)	(773,222)	2,330,395	137,797
	2002	17,590,697	250,363	(896,490)	2,822,055	120,078
	2001	25,347,752	1,531,231	(123,607)	3,378,880	342,416
	2000	16,366,605	2,235,929	833,116	3,454,137	324,324

It is noteworthy that the above amounts (with immaterial exceptions) are the amounts reported on the CHI federal income tax returns. That is, the net income amounts are calculated after the company’s tax deduction for Hood’s compensation amounts.

It is noteworthy—particularly to the Service and to the Tax Court—that CHI never declared or paid a cash dividend to its shareholders (i.e., Clary and Gail Hood) at any time during the review period.

The CHI Management Structure

Hood used various management titles with CHI during the review period. However, during this time period, Hood’s executive duties at CHI were generally the same: (1) oversight of the company’s equipment fleet (procurement, use, maintenance, and disposition); (2) hiring, training, and supervision of mechanics; (3) supervision and inspection of jobsites; (4) preparation, review, and approval of job fee estimates and budgets; (5) submission and negotiation of job bids; (6) setting employee salaries and bonuses; and (7) acquisition of bonding for grading projects.

According to the trial record, Hood rarely took vacations, and he typically worked between 60 and 70  hours per week (including weekends). Hood’s leadership and work ethic contributed to the CHI revenue growth and profitability. However, the Hood trial record indicated that much of the company’s success was also due to the hard work and dedication of the other CHI executives: Andy Painter, Tom Addley, Chris Phillips, Mrs. Gail Hood, and Wesley Hood (“Wesley”), the son of Mr. and Mrs. Hood.

Like Hood, Wesley joined his father’s construction company right after graduation from high school. After several years of operating heavy equipment for the grading company, Wesley became more involved in the CHI management. In the 2000s, Wesley became the CHI president and CEO. However, Wesley decided to leave CHI in 2011.

Painter replaced Wesley as the CHI president at the beginning of 2012. Painter typically worked hours similar to Hood, and Painter performed the following management functions: (1) preparation of estimates for, and bidding on,  prospective jobs; (2) oversight of the performance of projects; (3) engagement in business development; and (4) management of CHI daily operations.

Addley served in a similar capacity to Painter. Addley worked primarily as an onsite project manager for CHI, overseeing the performance of projects. In this management function, Addley typically worked 60 hours per week and performed the following functions: (1) assessing equipment and personnel needs, (2) maintaining client relations at project sites, and (3) monitoring the need for job modifications when warranted.

Phillips, a certified public accountant, joined CHI in 2010 as controller before becoming the company’s chief financial officer in 2011. Phillips’ duties at the company included (1) oversight of CHI finances; (2) review, negotiation, and payment of CHI loans; (3) oversight of insurance policies; (4) communication with bonding agents, banks, lenders, attorneys, and government agencies; (5) preparation of financial statements; (6) oversight of the CHI accounting department; and (7) continual review and analysis of costs in order to improve the company’s financial efficiency.

Gail Hood acted as a general adviser to CHI on equipment needs, project needs, personnel needs, and financial management. She was also responsible for personal guaranties to bonding companies during the review period. Mrs. Hood typically worked approximately 10 hours per week during the review period, but her responsibilities with the company decreased in the later end of the review period.

The Executive/Shareholder Compensation Amounts in Dispute

There was no written employment agreement in place between Hood and the company during the review period. The CHI board of directors, which was comprised solely of Clary and Gail Hood, set the amount of Hood’s annual compensation, including bonuses. Although they generally solicited and accepted the advice of the CHI independent accountants, Mr. and Mrs. Hood did not use any type of formula in setting Hood’s compensation amounts during the review period—except during the tax years at issue. During the review period, Hood received from CHI the amounts presented in Exhibit 3. CHI reported these amounts as employee compensation deductions on its federal income tax returns.

Exhibit 3: Clary Hood, Inc.

Compensation Paid to Mr. Clary Hood

Fiscal Years Ending May 31, 2000 through 2016

For Fiscal Year	Hood Salary ($)	Hood Bonus ($)	Hood Total Compensation ($)
2016	196,500	5,000,000	5,196,500
2015	168,559	5,000,000	5,168,559
2014	181,538	1,500,000	1,681,538
2013	381,707	1,000,000	1,381,707
2012	21,100	200,000	221,100
2011	83,400	35,000	118,400
2010	132,500	-0-	132,500
2009	130,000	-0-	130,000
2008	130,000	320,981	450,981
2007	130,000	221,685	351,685
2006	131,000	242,000	373,000
2005	130,000	1,000	131,000
2004	130,000	-0-	130,000
2003	127,337	-0-	127,337
2002	130,813	-0-	130,813
2001	130,000	107,000	237,000
2000	130,000	122,000	252,000

Based on the CHI agreement with its bonding companies, Mr. and Mrs. Hood agreed to personally guarantee any claim the bonding companies may have had against CHI during the review period for amounts beyond the company’s ability to pay (surety bond guaranties). Hood also agreed to personally guarantee payment of some of the CHI business loans, credit lines, and capital leases during the review period (“debt guaranties”).

In addition, CHI lent money to—and extended credit to—Hood and to some of his other business ventures during the review period. Before the tax years at issue in the dispute, CHI never compensated Hood (or Mrs. Hood) for the debt guaranties or for the surety bond guaranties.

In fall 2014, Phillips first discussed the issue of Hood’s compensation with the CHI independent accountants at the Elliott Davis, LLC (“Elliott Davis”) accounting firm. Phillips believed that Hood had been undercompensated in prior years. Phillips sought professional advice on how to develop the compensation for Hood on a going-forward basis. Jeff Greenway, an audit partner at Elliott Davis, sent Phillips a summary of salary surveys. That summary included data from a PAS, Inc. (“PAS”) survey and a 2010 Construction Financial Managers Association survey. Using this information, Phillips developed preliminary calculations to determine the amount that CHI had undercompensated Hood during the review period.

Phillips, Hood, Greenway, and Stacy Stokes, a tax partner at Elliott Davis, discussed Hood’s compensation situation during a fiscal year-end business meeting in May 2015. They all agreed that Hood (1) was undercompensated during the review period and (2) deserved a catch-up bonus in the amount of $5 million pending a follow-up compensation analysis.

The $5 million catch-up bonus amount was supported by an Excel spreadsheet (“the compensation due spreadsheet”) developed by Phillips. The compensation due spreadsheet presented a financial model with (1) the CHI income statements for each year of the review period through May 31, 2015, (2) Hood’s annual compensation for each of those years according to the CHI federal income tax returns, and (3) a series of items for each year labeled “Clary Hood Calculated Compensation.”

The “Clary Hood Calculated Compensation” items included the following: (1) a base salary beginning with $200,000 for the tax year ending May 31, 2000, then increasing 5 percent annually; (2) an annual bonus amount of 20 percent of profits before taxes; (3) an annual fee of $100,000 for bonding guaranties; and (4) an annual debt guaranty fee equal to approximately 1 percent of the debt and capital leases personally guaranteed by Hood.

The compensation due spreadsheet also incorporated data from the Greenway-provided salary surveys. Following the May 2015 meeting, Stokes provided Phillips with additional research on the topic of reasonable executive compensation. Stokes also modified the compensation due spreadsheet. Stokes added line items below the income statements, including a “Total Equity” figure and a “Return on Equity for the Year” calculation for each year during the review period.

Based on these inputs and calculations, the financial model concluded a proposed $5 million catch-up bonus amount for Hood.

The CHI board of directors met on May 21, 2015. The CHI board approved $5 million as a catch-up bonus payment to Hood for its 2015 tax year (“the 2015 amount”) described as “backpay compensation.”

In support of this catch-up bonus amount, the CHI board minutes described the following prior services rendered by Hood during the review period: (1) navigating CHI through “the loss of a president and long-time vice president in 2011”; (2) deciding “to change direction of the [c]ompany away from ‘big box’ grading work to more industrial grading opportunities”; (3) “[d]ealing [with] and reacting to the most severe recession faced by the [c]ompany in 2009–2011”; (4) “personally guaranteeing most or all of the [c]ompany debt, capital leases, and credit lines since inception”; (5) acting as the “[p]ersonal guarantor to the [c]ompany’s bonding company since inception”; (6) “[p]roviding a steadying influence to both customers, vendors, and, most importantly, employees”; (7) “leading the [c]ompany by being prudent in seeking job opportunities and the purchasing of equipment necessary to handle the [c]ompany’s emergent work opportunities”; (8) “personally overseeing that equipment used by Clary Hood, Inc. on job sites met or exceeded expectations in the performance of the job”; and (9) “managing and leading the [c]ompany over the most profitable four year run in its existence.”

Listing the same reasons, the CHI board approved another $5 million as a catch-up bonus payment to Hood on May 20, 2016 (“the 2016 amount”).

It is noteworthy that Hood personally set the salaries and bonuses for all CHI officers and personnel on an individual basis. For the fiscal years ending May 31, 2010 through 2016, CHI paid its officers and other executive employees (other than Hood) the amounts presented in Exhibit 4—amounts that it characterized as compensation expense (excluding bonuses).

Exhibit 4: Clary Hood, Inc.

Compensation (Other than Bonuses) Paid to Senior Executives

Fiscal Years Ending May 31, 2010 through 2016

For Fiscal Year $	Andy Painter Compensation $	Tom Addley Compensation $	Gail Hood Compensation $	Chris Phillips Compensation $	Wesley Hood Compensation $
2016	233,654	233,654	104,800	114,900	52,000
2015	191,500	191,500	85,546	74,000	52,000
2014	178,646	178,646	56,480	52,083	52,000
2013	113,907	113,907	26,000	51,454	3,000
2012	-0-	-0-	24,220	50,824	20,520
2011	-0-	-0-	23,680	23,400	164,080
2010	-0-	-0-	26,500	19,600	157,000

For the fiscal years ending May 31, 2013 through 2016, CHI also paid its officers and other executive employees (other than Hood) additional amounts—amounts that it characterized as bonuses. These annual bonus payment amounts are presented in Exhibit 5.

Exhibit 5: Clary Hood, Inc.

Bonus Amounts Paid to Senior Executives

Fiscal Years Ending May 31, 2013 through 2016

For Fiscal Year $	Andy Painter Bonus $	Tom Addley Bonus $	Gail Hood Bonus $	Chris Phillips Bonus $
2016	100,000	80,000	-0-	60,000
2015	40,000	40,000	-0-	30,000
2014	30,000	30,000	-0-	25,000
2013	25,000	25,000	-0-	25,000

Notice of Deficiency and Filing of the Tax Court Petition

Following an audit of the CHI federal income tax returns, the Service issued a notice of deficiency for the tax years at issue. The notice of deficiency concluded that portions of Hood’s compensation paid for the tax years at issue exceeded reasonable compensation amounts under Section 162(a)(1). The Service disallowed the deduction for this alleged excess (greater than the reasonable amounts) compensation payments.

The Service allowed $517,964 of the $5,711,105 total amount CHI reported as compensation for Hood for the 2015 tax year and $700,792 of the $5,874,585 total amount CHI reported as compensation for Hood for the 2016 tax year. The Service’s notice concluded total deficiencies of $1,581,202 and $1,613,308 for the 2015 and 2016 tax years, respectively.

The Service’s notice also included accuracy-related penalties under Section 6662 for underpayments due to the substantial understatement of income tax of $316,240 and $322,662 for the 2015 and the 2016 tax years, respectively.

In response to the Service’s notice of deficiency, CHI filed a petition with the U.S. Tax Court, disputing (1) the disallowed compensation amounts and (2) Section 6662 substantial understatement penalties.

The Tax Court’s Opinion

The Tax Court memorandum opinion provides a fulsome discussion of the court’s analysis of the factors affecting the reasonableness of Hood’s executive compensation (and of CHI’s income tax deduction). First, the decision addressed the issue of why the taxpayer CHI had the burden of proof in the Hood matter.

Burden of Proof

Not surprisingly, the Tax Court concluded that (1) the Service’s determinations set forth in its notice of deficiency are generally presumed to be correct and (2) the taxpayer (in this case, CHI) bears the burden of proving that the determinations are in error. Specifically, the Hood decision mentions Cozart Packing Co. v. Commissioner,[1] which applies this presumption to a reasonable compensation determination. Citing INDOPCO, Inc. v. Commissioner,[2] the Hood decision states the rule that the taxpayer bears the burden of proving entitlement to any deduction claimed.

After addressing the initial burden of proof issue, the Hood decision systematically described the relevant issues related to the reasonableness of executive/shareholder compensation analysis.

The Tax Court’s analysis and conclusions in the Hood decision are described in part two of this three-part discussion.

The opinions and materials contained herein do not necessarily reflect the opinions and beliefs of the author’s employer. In authoring this discussion, neither the author nor Willamette Management Associates, a Citizens Company, is undertaking to provide any legal, accounting or tax advice in connection with this discussion. Any party receiving this discussion must rely on its own legal counsel, accountants, and other similar expert advisors for legal, accounting, tax, and other similar advice relating to the subject matter of this discussion.

[1] Cozart Packing Co. v. Commissioner, T.C. Memo. 1972-175, aff’d, 475 F.2d 1339 (4th Cir. 1973).

[2] INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84 (1992).

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Robert Reilly, CPA, ASA, ABV, CVA, CFF, CMA, is a Managing Director in the Chicago office of Willamette Management Associates, a Citizens company. His practice includes valuation analysis, damages analysis, and transfer price analysis.

Mr. Reilly has performed the following types of valuation and economic analyses: economic event analyses, merger and acquisition valuations, divestiture and spin-off valuations, solvency and insolvency analyses, fairness and adequacy opinions, reasonably equivalent value analyses, ESOP formation and adequate consideration analyses, private inurement/excess benefit/intermediate sanctions opinions, acquisition purchase accounting allocations, reasonableness of compensation analyses, restructuring and reorganization analyses, tangible property/intangible property intercompany transfer price analyses, and lost profits/reasonable royalty/cost to cure economic damages analyses.

Mr. Reilly has prepared these valuation and economic analyses for the following purposes: transaction pricing and structuring (merger, acquisition, liquidation, and divestiture); taxation planning and compliance (federal income, gift, estate, and generation-skipping tax; state and local property tax; transfer tax); financing securitization and collateralization; employee corporate ownership (ESOP employer stock transaction and compliance valuations); forensic analysis and dispute resolution; strategic planning and management information; bankruptcy and reorganization (recapitalization, reorganization, restructuring); financial accounting and public reporting; and regulatory compliance and corporate governance.

Mr. Reilly can be contacted at (773) 399-4318 or by e-mail to RFReilly@Willamette.com.