Texasgulf Inc. and Subsidiaries, as Successor in Interest to Texasgulf Inc. and Subsidiaries - Page 25

                                       - 25 -                                         

               For the 13-year period, the total amount of processing                 
          allowance claimed on returns in the Parsons OMT Report was                  
          Can$2,237,700,000, which is more than three times the total                 
          amount of nonrecoverable expenses (Can$705,200,000).                        
               Parsons concluded that the aggregate amount of processing              
          allowance claimed by OMT taxpayers in his report exceeded their             
          aggregate amount of nonrecoverable expenses by 3.2 to 1.                    
          Respondent does not dispute that conclusion.  Total processing              
          allowances claimed on returns exceeded nonrecoverable expenses              
          for 11 of the 13 years in the Parsons OMT Report.                           
               The Parsons OMT Report also shows that the processing                  
          allowances claimed by the vast majority of OMT taxpayers in the             
          study exceeded those taxpayers' nonrecoverable expenses.  The               
          Parsons OMT Report also shows that nonrecoverable expenses                  
          exceeded processing allowances in 21 of 145 returns from eight              
          OMT taxpayers.                                                              
               4.   Respondent’s Expert                                               
               Hallett concluded that nonrecoverable expenses exceeded the            
          processing allowance in only 60 of 213 OMT returns in the Parsons           
          OMT Report if all OMT returns are considered, whether or not tax            
          was due.  Nineteen of those 60 returns were from taxpayers that             
          owed OMT.                                                                   
               Hallett stated his opinion that the nonrecoverable expenses            
          were significant.  His opinion, even if correct, does not affect            





Page:  Previous  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  Next

Last modified: May 25, 2011