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that petitioner has shown by clear and convincing evidence was
reasonable compensation in 1992 for purposes of section
280G(b)(4).65
(bb) Mr. Richardson
Mr. Richardson’s 1992 compensation, excluding the Retention
Payment and disputed 1991 SRP Benefit, was $353,346. Because
reasonable compensation for Mr. Richardson in 1992 exceeded his
1992 compensation (exclusive of the Retention Payment and
disputed 1991 SRP Benefit) by $406,014, this excess constitutes
the amount of Mr. Richardson’s Retention Payment and disputed
1991 SRP Benefit that petitioner has shown by clear and
convincing evidence was reasonable compensation in 1992 for
purposes of section 280G(b)(4).
65 Respondent also argues that Mr. Garrett’s Retention
Payment (but not his 1991 SRP Benefit) cannot be reasonable
compensation for services because it is a severance payment
within the meaning of Q&A-44 of sec. 1.280G-1, Proposed Income
Tax Regs., 54 Fed. Reg. 19407 (May 5, 1989). We need not address
this contention, however, because the disputed 1991 SRP Benefit
received by Mr. Garrett, which respondent concedes is not a
severance payment, equaled $239,712. We conclude above that
petitioner has established that $167,467 of the (combined)
Retention Payment and 1991 SRP Benefit paid to Mr. Garrett in
1992 constituted reasonable compensation. Amounts above this
figure are not reasonable compensation for 1992 services.
Accordingly, $167,467 of the $239,712 1991 SRP Benefit is
reasonable compensation, but the remainder of the 1991 SRP
Benefit and all of the Retention Payment is not. Because Mr.
Garrett’s Retention Payment would not in any event constitute
reasonable compensation, we need not decide whether it is also
not reasonable compensation because it is a severance payment.
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