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net operating loss carryback from 1982 to 1980, adjusted the
investment credit recapture for 1981, and recomputed the
investment and other tax credits as well as the minimum tax for
several of the taxable years from 1970 through 1982.
Respondent's adjustments resulted in deficiencies in Federal
income tax in the amounts of $1,299, $112,652, $379,041,
$1,694,423, and $961,212 for the taxable years 1972, 1976, 1978,
1980, and 1981, respectively. Respondent mailed the notice of
deficiency to petitioner on April 29, 1993, and petitioner timely
filed its petition in this Court.
OPINION
Petitioner argues that the annual credit card fee is a
payment for services, and as such is eligible for partial
deferral from the inclusion in income under Rev. Proc. 71-21,
1971-2 C.B. 549. Respondent's position is that the fee is not
payment for services, but rather, is a payment "for membership in
the card plan", which respondent then equates to an extension of
credit in the nature of additional interest or a loan commitment
fee. In the alternative, respondent argues that if the fee is
for services, then petitioner's deferral does not clearly reflect
income, and respondent's denial of the benefits of Rev. Proc. 71-
21 was not an abuse of discretion. Respondent argues that in
either view, Rev. Proc. 71-21 is not available to petitioner, and
the fees must be included in income in the year of receipt.
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