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corporate income tax returns on behalf of itself and its domestic
subsidiaries for the taxable years ended December 31, 1979,
December 31, 1980, December 31, 1981, and December 31, 1982, with
the District Director, Chicago, Illinois, reflecting Amoco's
timely election to: (1) Apply the provisions of the 1983 foreign
tax credit regulations retroactively to the years at issue, and
(2) apply the "safe harbor" method of determining allowable
foreign tax credits with respect to Egyptian taxes.
Applying the "safe harbor" method in its amended returns,
petitioner treated portions of the Egyptian income taxes reported
on its original returns as creditable taxes. The remainder was
deducted in computing taxable income. The amounts reported on
petitioner's amended returns are summarized as follows:
Year Credit Claimed Deducted Total
1979 $215,414,631 $ 88,601,262 $304,015,893
1980 459,881,927 38,204,353 498,086,280
1981 383,993,639 173,879,789 557,873,428
1982 308,490,746 145,095,933 453,586,679
Egyptian income taxes claimed as foreign tax credits by
Amoco in 1979 were not utilized to reduce Amoco's 1979 U.S. tax
liability and were carried forward to 1980 and subsequent tax
years.
On June 18, 1992, respondent issued a statutory notice of
deficiency to petitioner for the 1980, 1981, and 1982 tax years.
In the notice of deficiency, respondent determined that Amoco
Egypt's Egyptian income taxes had not been paid within the
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