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Section references are to the Internal Revenue Code in
effect for the years in issue. Rule references are to the Tax
Court Rules of Practice and Procedure.
FINDINGS OF FACT
1. Petitioner
Petitioner is a Virginia bank holding company that has its
principal place of business in Richmond, Virginia. Petitioner is
the parent of a consolidated group of corporations and the
successor to the Bank of Virginia Co. (BOVACO). BOVACO was the
parent of an affiliated group of corporations that filed
consolidated Federal income tax returns from 1982 to 1985.
BOVACO changed its name to Signet in 1986. Petitioner is in the
banking business. Petitioner is an accrual method taxpayer.
2. The MasterCard Credit Cards
In 1953, petitioner started the BOVA (Bank of Virginia)
Charge Plan. In 1967, petitioner was a founding member of the
Interbank Card Association, which later became MasterCard
International. Before, during, and after the years at issue,
petitioner issued MasterCards and a small number of Visa credit
cards.1
1 The parties agreed to refer to petitioner’s cardholders as
MasterCard cardholders even though respondent's determination
also applies to annual membership fees charged to Visa
cardholders.
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