- 142 - 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,Page: Previous 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 Next
Last modified: May 25, 2011