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I.R.C., does not apply, and the deduction for vacation
and severance pay is an allowable deduction for P's
1991 taxable year under sec. 83(h), I.R.C., and sec.
1.83-6(a)(3), Income Tax Regs.
Theodore W. Hirsh, Andrea R. Macintosh, and Frances M.
Angelos, for petitioners.
Clare J. Brooks, for respondent.
OPINION
TANNENWALD, Judge: Respondent determined the following
deficiencies in petitioner's Federal income taxes:
Taxable Year Ended Deficiency
Dec. 26, 1987 $ 6,982.00
Dec. 31, 1988 193,182.00
Dec. 28, 1991 2,873.00
After concessions, the sole issue for decision is whether
petitioner may deduct for its 1991 tax year amounts for vacation
and severance pay which accrued in that year, were funded within
2-1/2 months of the end of that year, i.e., March 13, 1992, by
means of an irrevocable letter of credit, and were includable in
the income of the employees as of that date.
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