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OPINION
We must decide whether any or all of the $1,750,000 paid to
Mr. Ashare in 1993 was reasonable compensation under section
162(a)(1). Petitioner argues it was, asserting that it paid Mr.
Ashare the disputed amount to compensate him for past and present
services. Petitioner asserts that it had a formula under which
Mr. Ashare would be paid all legal fees received by petitioner
and that the $12,242,500 paid to Mr. Ashare over the 5-year
period from 1989 to 1993 was less than the $12,567,623 received
on the Gentile case. Respondent argues that the disputed amount
is nondeductible because it was neither reasonable in amount nor
paid to Mr. Ashare to compensate him for past or present
services.
Before deciding this issue, we pause to discuss a claim by
petitioner that respondent violated its rights under section
7605(b) by conducting a second examination of its books of
account for 1993. Petitioner contends that the revenue agent
performed a second examination when he asked Mr. Lieberman for
petitioner's minutes. Petitioner asserts that respondent needed
petitioner's 1993 board resolutions to determine that petitioner
had paid Mr. Ashare unreasonable compensation during that year.
We understand petitioner to conclude that respondent, because of
the purported second examination, is precluded from asserting in
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