- 5 - deficiency to petitioner. The accumulated earnings tax issue was the primary adjustment determined by respondent. Respondent determined that petitioner had accumulated excess taxable income of $116,291 in 1987, $76,275 in 1988, and $143,917 in 1989 that was taxable under section 531. On October 23, 1991, petitioner submitted a statement under section 534(c) detailing its plans to expand its oil, gas, film, and television businesses. Petitioner attached copies of corporate minutes to verify the amounts of accumulated earnings needed for each of petitioner's expansion programs. Petitioner also stated that it needed a reserve for contingent liabilities from an NFC Oil Co. lawsuit settled in 1988, environmental liabilities including plugging oil wells, and breach of contract and copyright violations. Petitioner attached copies of corporate minutes to verify the amounts it needed for these reserves. On November 27, 1991, petitioner filed the petition in this case. In it, petitioner denied that it was subject to the accumulated earnings tax and referred to the section 534(c) statement it filed in which it stated its needs to accumulate earnings. Respondent filed the answer on January 27, 1992, and an amended answer on February 24, 1992. Respondent alleged that petitioner's section 534(c) statement was not sufficient.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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