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COLVIN, J., concurring: I agree with the reasoning and
conclusions stated by the majority. The majority concludes that
section 83(h) does not allow petitioner to deduct the value of
stock that it transferred to 12 of its employees as compensation
for services in the year of the transfer. The majority denies
the deduction because none of the 12 employees included the value
of the stock in income, and because petitioner did not qualify
for safe harbors provided in applicable regulations that allow
the employer a deduction if it meets certain withholding or
reporting requirements. I concur to emphasize some points of
agreement with the majority.
Judge Ruwe recognizes that his interpretation of section
83(h) raises questions about "the 'equity' of allowing a
corporate deduction for compensation paid to its controlling
shareholders and principal officers, who failed to report the
same items as income." Judge Ruwe's dissent p. 54. I agree with
the majority that Congress did not intend and the statute does
not require the inequitable result that follows from the
dissent's reasoning.
I.
"Included"
Section 83(a) requires that a service provider (e.g., an
employee) include the fair market value of property received from
the employer in his or her gross income in the first taxable year
in which the rights of the person having the beneficial interest
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