- 96 -
While it is possible that some portion of the 1991 SRP
Benefits is theoretically allocable to services provided in years
other than 1992, petitioner has made no showing in this regard
and instead has stipulated that the 1991 SRP Benefits were
“earned” by the Retained Executives in 1992. In addition, the
1991 SRP Benefits were paid in 1992 and deducted in full by
petitioner in that year. In these circumstances, giving due
regard to the fact that petitioner bears a “clear and convincing”
burden of proof, we find that the 1991 SRP Benefits are allocable
in full to the Retained Executives’ 1992 compensation.57
As earlier noted, supra note 28, respondent has conceded
that a portion of the 1991 SRP Benefit paid to each Retained
Executive should not be treated as contingent on a change of
control under Q&A-24(c) of the proposed regulations. See sec.
1.280G-1, Q&A-24(c), Proposed Income Tax Regs., 54 Fed. Reg.
19399 (May 5, 1989). Respondent maintains his position that the
remainder of the 1991 SRP Benefits not excluded from parachute
57 As noted, we are also unpersuaded by Mr. Rosenbloom’s
position that the 1991 SRP Benefits should be allocated ratably
over the years in the period 1992-95 in which a Retained
Executive remained employed by petitioner, the same treatment he
applied to the Retention Payments. Since the Retention Payments
were subject to clawback while the 1991 SRP Benefits were not, we
do not believe that the same treatment is appropriate for both
types of payments. Moreover, the ratable allocation advocated by
Mr. Rosenbloom conflicts with the parties’ stipulation that the
1991 SRP Benefits were “earned” in 1992.
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