- 21 -
Respondent argues that petitioner's exhibit does not support
its contention as to its taxable years 1991 through 1993.
Additionally, respondent argues that petitioner provides
conflicting facts; viz, petitioner's Dun & Bradstreet report:
(1) States that, as of September 9, 1992, petitioner's bank was
NationsBank of Georgia, NA, but that, as of October 9, 1993,
petitioner's bank was Trust Company of Georgia, and (2) lists
petitioner's account averages as "moderate 5 figures."
We agree with respondent and hold that petitioner has not
disclosed in its statement a sufficient basis to justify its
accumulation for the purpose of maintaining favorable banking
relations. Accordingly, we hold that the burden of proof remains
with petitioner as to the fifth ground.
6. Maintenance of Favorable Supplier Relationships
Petitioner states that it reasonably accumulated $10 million
during each of the years in issue to maintain a 4-A credit rating
with Dun & Bradstreet. Petitioner states that, during the years
in issue, petitioner's management "made a determination to
continuously strive for a 4-A credit rating" from Dun &
Bradstreet, which requires a net worth of at least $10 million.
Additionally, petitioner states that the accumulation of capital
has enabled petitioner to maintain a 4-A credit rating for the
past several years, which it views as a distinct advantage in an
industry known for slow paying manufacturers and retailers.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011