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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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