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Notwithstanding this conclusion, we do not allow respondent to
disavow the amount allowed in the PKV&S notice of deficiency for
“deferred compensation” paid to Rose in 1992 (as respondent
attempts to do on brief) because to do so would be to permit
respondent to increase the related deficiency without making a
timely claim for it. See sec. 6214(a); Estate of Petschek v.
Commissioner, 81 T.C. 260, 271-272 (1983); see also Koufman v.
Commissioner, 69 T.C. 473, 475-476 (1977).
Under certain circumstances, prior services may be
compensated in a later year. Lucas v. Ox Fibre Brush Co., 281
U.S. 115, 119 (1930). In such instances, however, the taxpayer
must establish that there was not sufficient compensation in
prior periods and that, in fact, the current year’s compensation
was to compensate for that underpayment. Estate of Wallace v.
Commissioner, 95 T.C. 525, 553-554 (1990), affd. on another
ground 965 F.2d 1038 (11th Cir. 1992); see also Pac. Grains,
Inc. v. Commissioner, supra at 606.
In support of their argument that Rose was insufficiently
compensated for his services to PK Ventures and its subsidiaries
during 1986 through 1991, petitioners claim that a deferred
compensation agreement existed between Rose and those
corporations during those years and that the “going concern”
notes included in the notes to the audited financial statements
for the year ended December 31, 1989, for PK Ventures, SLPC,
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