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T.D. 8599, supra, 1995-2 C.B. at 12-13. Petitioner can find no
refuge in current section 1.83-6, Income Tax Regs., because:
(1) It has not issued a Form W-2 or Form 1099, and (2) none of
its employees has included the value of the Endotronics stock in
his or her gross income.
Nor can petitioner find refuge in section 1.83-6(a)(3),
Income Tax Regs. Section 1.83-6(a)(3), Income Tax Regs.,
provides an exception to the general timing rule of section
1.83-6(a)(1), Income Tax Regs., in that the deduction afforded by
section 1.83-6(a)(1) and/or (2), Income Tax Regs., is allowed to
the employer in accordance with its method of accounting where
the underlying property is substantially vested upon transfer.
Section 1.83-6(a)(3), Income Tax Regs., does not, as argued by
petitioner, provide an independent basis for deducting an amount
under section 83(h). Section 1.83-6(a)(3), Income Tax Regs.,
merely sets forth the time that an amount is deductible, where
the employer's right to the deduction has already been
established by section 1.83-6(a)(1) and/or (2), Income Tax Regs.
The fact that section 1.83-6(a)(3), Income Tax Regs., is only a
timing provision is quickly seen by comparing the rules contained
in that section with the rules contained in section 1.83-6(a)(1),
Income Tax Regs. Section 1.83-6(a)(1), Income Tax Regs., tracks
the statutory text in that they both contain three separate
rules, the first of which allows a deduction under section 162 or
212, the second of which sets forth the amount of the deduction,
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