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general rule in former section 1.83-6(a)(1) permitted
the deduction for the amount "includible" in the
service provider's gross income. [T.D. 8599, 1995-2
C.B. at 12.]
After describing a special rule provided in the regulations
in effect from 1978 to 1995 (reasonably characterized as a safe
harbor by the majority, majority op. p. 14), the preamble
continues as follows:
The special rule was designed to ensure that the
service recipient's deduction was in fact offset by a
corresponding inclusion in the service provider's gross
income. [T.D. 8599, 1995-2 C.B. at 12.]
The "difficulty" to which the first of these two quotes
refers is the service recipient's task of proving that a service
provider included the fair market value of property in income.
The regulations in effect from 1978 to 1995 presented that
"difficulty", prompting the IRS to provide a safe harbor. Thus,
the preamble accompanying issuance of the 1995 regulations shows
that the meaning of "included" in section 83(h) was the same
before and after 1995, and is as the majority holds.
III.
Judge Ruwe's Dissent's Concerns About Practicality
Judge Ruwe's dissent is concerned that the result reached by
the majority leads to a rule compliance with which is
"impractical, if not impossible" for employers and employees or
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