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forfeiture of their vacation entitlements, those entitlements
were based solely on the 160 days of service rendered in the
preceding calendar year. The ruling did not address the issue of
leave advances as provided by the General Plan.
Moreover, unlike I.T. 3956, for each of the plans at issue,
the service requirements had only been partially fulfilled by the
end of the respective taxable years. Consistent with I.T. 3956,
respondent disallowed petitioner's deductions only to the extent
that the qualifying services had not been performed by the last
day of TYE 8701 and TYE 8801. Consequently, we hold that
vacation pay, based on units of service worked after the close of
TYE 8701 and TYE 8801 and before the due dates of those returns
as extended, was not earned in TYE 8701 and TYE 8801, as required
by section 463(a)(1), and is therefore not deductible in those
years.
To reflect the foregoing and issues previously resolved,
Decision will be entered
under Rule 155.
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