Law Offices--Richard Ashare, P.C. - Page 3

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               1.  Whether respondent violated the prohibition of section             
          7605(b) against a second examination of petitioner's books of               
          account for 1993.  We hold he did not.                                      
               2.  Whether section 162(a) allows petitioner to deduct the             
          $1,750,000 as compensation.  We hold it does.                               
               Unless otherwise indicated, section references are to the              
          Internal Revenue Code in effect for the applicable years.  Rule             
          references are to the Tax Court Rules of Practice and Procedure.            
          Dollar amounts are rounded to the nearest dollar.                           
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated.  The stipulation of            
          facts and the exhibits submitted therewith are incorporated                 
          herein by this reference.  Petitioner is a corporate law firm               
          that specializes in State and municipal employee pension benefits           
          and the litigation thereof.  It uses the cash method for Federal            
          income tax purposes and an accrual method for book purposes.  Its           
          principal place of business was in Detroit, Michigan, when its              
          petition was filed.                                                         
               Richard Ashare, an attorney, incorporated petitioner in 1974           
          with a capital contribution of $1,000.  Mr. Ashare is                       
          petitioner's sole shareholder and one of its two employees.                 
          Petitioner's other employee is Mr. Ashare's secretary, Kathleen             
          Moore Baker (Ms. Moore).  Petitioner has three directors:  Mr.              
          Ashare, his wife, Marlene, and his longtime tax adviser, Barry              

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