Alpha Medical, Inc., f.k.a. Alpha Medical Management, Inc. - Page 39

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               In 1984, Rogers rejected a job that offered to pay him in              
          excess of $1 million a year to manage a home health care                    
          division.  Instead, Rogers went to work for petitioner in 1986,             
          managing its home health care business.  Petitioner paid Rogers             
          $66,943, $75,914, $431,702, and $928,883 in 1986, 1987, 1988, and           
          1989, respectively.  It is evident, therefore, that Rogers was              
          underpaid in each of those 4 years.                                         
               Thus, we find that petitioner has met its burden of proving            
          that part of the compensation paid Rogers in 1990 was intended to           
          compensate him for services he performed prior to 1990.                     
               Conclusion                                                             
               We come to the point where we must use our best judgment,              
          after weighing the evidence, to reconcile and integrate the                 
          factors discussed above and reach our ultimate conclusion.                  
          Because of all the factors and circumstances here present, we               
          have given the issue herein a close scrutiny with the result that           
          we agree with neither petitioner nor respondent.  On the basis of           
          our examination of the entire record we hold that $2.3 million              
          constituted reasonable compensation to Rogers for personal                  
          services rendered to petitioner in 1990 and prior years.                    
          Issue 2. Accuracy-Related Penalty Under Section 6662                        
               Respondent determined an accuracy-related penalty under                
          section 6662 against petitioner for 1990 equal to 20 percent of             
          the tax deficiency.                                                         





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