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the year ended December 28, 1991. The taxpayer's employees
received unrestricted property representing the accrued vacation
and severance pay on March 13, 1992, which was during the
employees' calendar year ended December 31, 1992. If the
explicit timing provisions of section 83(h) and section 1.83-
6(a)(2), Income Tax Regs., applied, the taxpayer would not have
been entitled to take the deduction until its taxable year ended
December 28, 1993; i.e., the taxpayer's taxable year in which or
with which ends the employee's taxable year in which the amount
was includible in the employee's income. Nevertheless, based on
the exception in subparagraph (3), we allowed the deduction in
the year ended December 28, 1991, in accordance with the
taxpayer's accrual method of accounting.13
The instant case turns on an interpretation of section 83
and the regulations. Legal interpretations should not be driven
by the facts of a particular case. While I disagree with the
majority's interpretation, I recognize that the operative facts
of this particular case raise 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. However, neither respondent nor
13In Schmidt Baking Co. v. Commissioner, 107 T.C. 271
(1996), the parties had stipulated that the taxpayer-employer had
not withheld taxes when it transferred the property on Mar. 13,
1992.
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