SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

Mail Stop 3720

November 21, 2008
  Mr. Jeffrey K. Berg  President, Chief Executive Officer and Director Communications Systems, Inc.  10900 Red Circle Drive Minnetonka, MN  55343
 RE: Communications Systems, Inc.
Form 10-K for the year ended December 31, 2007
  Filed March 31, 2008   File No. 001-31588

 Dear Mr. Berg:
We have reviewed your filing and have the following comments.  If you disagree with a
comment, we will consider your explanation as to why it is inapplicable or a revision is
unnecessary.  Please be as detailed as  necessary in your explanation.
  Please comply with our comments in future  filings.  Confirm in writing that you will do
so and also explain to us how you intend to compl y.  Please do so within the time frame set forth
below.  Please understand that after our revi ew of your responses, we may raise additional
comments.   Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requir ements and to enhance the overall disclosure in
your filing.  We look forward to working with you in these respects.  We welcome any questions
you may have about our comments or on any other aspe ct of our review.  Feel free to call us at
the telephone numbers listed at  the end of this letter.

Form 10-K for the year ended December 31, 2007

 Item 1A.  Risk Factors, page 9

 1. In future filings, please set forth each risk  factor under a subcap tion that adequately
describes the risk.  Refer to Item  503(c) of Regulation S-K.

Communications Systems, Inc.
November 21, 2008 Page 2

2. We note the disclosure under your first bul let point of this section indicating that
management had not yet completed “the proc ess of documenting and testing its internal
controls as required by the Sarbanes-Oxley Act of 2002.”  However, later under Item 9A,
your disclosure indicates that management conducted an evaluation of the company’s
internal control over financial reporting as  of December 31, 2007, and concluded that it
was not effective.  Please advise.
 Item 5.  Market for Registrant’s Common Equ ity and Related Stockholder Matters, page 12

 Repurchases of Issuer’s E quity Securities, page 14

 3. In future filings, please comply with Item 703 of Regulation S-K.  Specifically, please
include footnote disclosure provided by Instruc tion 2 to paragraphs (b)(3) and (b)(4) of
Item 703 relating to all repurchasing plans publicly announced.  We note the adoption of
a plan during your third quarter of 2007; how ever, appropriate footnote disclosure was
not included in your third quarter Form 10-Q either.
 Item 7.  Management’s Discussion and Analys is of Financial Condition and Results of
Operations, page 16
4. In future filings, please consider includi ng an “overview” section that provides a
balanced, executive-level discus sion identifying, on a past and prospective basis, the most
important themes or other significant matte rs with which management is concerned
primarily in evaluating the company's fina ncial condition and ope rating results. A good
introduction or overview would:

• include economic or industry-wide factor s relevant to the company and serve
to inform the reader about how the company earns revenues and income and generates cash without merely duplicati ng disclosure in th e Description of
Business section; and

• provide insight into material opportun ities, challenges and risks, such as
those presented by known material tre nds and uncertainties, on which the
company’s executives are most focused for both the short and long term, as well as the actions they are taking to address these opportunities, challenges
and risks.
 5. In future filings, you should consider providi ng more analysis as to  reasons behind your
period-to-period changes in your “results of operations” section.  Mo re detail should be
provided as to why line items have changed and whether any changes have prospective
implications.  In addressing prospective fi nancial condition and operating performance,
there are circumstances, particularly regardi ng known material trends and uncertainties,
where forward-looking information is required to be disclosed.

Communications Systems, Inc.
November 21, 2008 Page 3

Definitive Proxy Statement Incorporated By Reference Into Part III of Form 10-K

 Role of the Compensation Committee and the Board, page 8

 6. For purposes of Item 407(e)(3)(ii) of Regulati on S-K, please identify in future filings, any
role executive officers of the company have in determining or recommending the amount
of or form of executive and director compensation.
 7. We note your disclosure on page 9 relate d to the Compensation Committee’s use of
surveys in determining “competitive levels of overall cash compensation.”  It appears that the Compensation Committee uses the surveys underlying the comparable companies for benchmarking purposes.  If so, you must identify  the companies used in the surveys.  In
future filings, for purposes of Item 402(b)(2)(xiv) of Regulation S-K, please identify the benchmarked companies.
 Compensation Philosophy and Overview of  Executive Officer Compensation, page 9

 8. In future filings, please expand your analysis  to discuss your compensation philosophy in
the context of the actual levels of compensati on paid for the last completed fiscal year.
For example, discuss how the amounts paid with respect to your non-equity incentive
plan compensation relate to the actual ta rgets set for each performance measure.

Discussion of Elements of Execu tive Officer Compensation, page 9

 9. We note that base salary and annual incentive plan awards are tied to the achievement of
specified performance targets.  In future filings, please disclose the performance targets that are used in the adjustment of base sa lary and those performa nce targets set for the
achievement of incentive compensation.  If you believe that disclosure of performance
goals is not required because it would result in competitive harm such that you may omit this information under Instruction 4 to Item 402(b) of Regulation S-K, please provide in
your response letter a detailed explanation of such conclusi on.  If you believe you have a
sufficient basis to keep the information conf idential, disclose in future filings how
difficult it would be for the executive or how likely it would be for you to achieve the
undisclosed performance goal.  Please note that  general statements regarding the level of
difficulty or ease associated with achieving th e goals are not sufficient.  In discussing
how difficult it will be for an executive or how likely it will be for you to achieve the
performance goals, provide as much detail as necessary without providing information
that would result in competitive harm.
 Summary Executive Compensation Table, page 11

 10. It appears that amounts that you have char acterized a bonus awards to your executive
officers are based on satisfacti on of performance targets that  were pre-established and
communicated to your executives.  Therefore, in future filings, these amounts should be
reported in your summary compensation tabl e as non-equity incentive plan awards.

Communications Systems, Inc.
November 21, 2008 Page 4
Amounts disclosed under the bonus column should only be awards that were purely discretionary without correlation to satisfa ction of specific performance measures.
 11. We note your disclosure in footnote four di scussing Mr. Sampson’s retirement from the
position of Chief Executive Officer in June of 2007.  In addition, we note the company’s
disclosure stating Mr. Sampson continued as Chairman of the Board of Directors after
June of 2007.  Please confirm in your respons e letter that the amount of Mr. Sampson’s
compensation earned as a Director would not have required disclosure under the
“Director Compensation” table on page 13, or in an appropriate footnote to the
“Summary Executive Compensation” table on page 11.
 Director Compensation, page 13

 12. We note your current report on form 8-K,  filed with the Commission on June 22, 2007,
announcing the retirement of Wayne E. Sampso n as a director on June 21, 2007.  Please
confirm in your response lett er that the amount of Mr. Sa mpson’s compensation earned
prior to his retirement would not have re quired him to be included as part of the
company’s director compensation disclosu res required under Item 402(r) of Regulation
S-K.

*    *    *    *

Please respond to these comments within 10 business days or tell us when you will
provide us with a response.  Please furnish a lett er that keys your respon ses to our comments and
provides any requested information.  Detailed letter s greatly facilitate our review.  Please file
your letter over EDGAR.  Please understand th at we may have addi tional comments after
reviewing your responses to our comments.     We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filings reviewed by the staff to be certain  that they have provided all information investors
require for an informed decision.  Since the comp any and its management are in possession of all
facts relating to a company’s disclosure, they are responsible for the acc uracy and adequacy of
the disclosures they have made.     In connection with responding to our comme nt, please provide, in writing, a statement
from the company acknowledging that
• the company is responsible for the adequacy an d accuracy of the disclo sure in the filings;

• staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filings; and

• the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

Communications Systems, Inc.
November 21, 2008 Page 5
 In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the sta ff of the Division of Corporati on Finance in our review of your
filings or in response to our  comments on your filings.

You may contact Reid Hooper, Staff Attorn ey, at (202) 551-3359, or  me, at (202) 551-
3810 with any questions.            S i n c e r e l y ,
Assistant Director
         L a r r y  S p i r g e l