Hospital Corporation of America and Subsidiaries - Page 3

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               Robert J. Shilliday, Jr., Vallie C. Brooks, and William B.             
          McCarthy, for respondent.                                                   


               WELLS, Judge:  These cases were consolidated for purposes of           
          trial, briefing, and opinion and will hereinafter be referred to            
          as the instant case.1  Respondent determined deficiencies in                
          petitioners' consolidated corporate Federal income tax as shown             
          below.                                                                      
                         TYE               Deficiency                                 
                         1978           $2,187,079.00                                 
                         1980           388,006.58                                    
                         1981           94,605,958.92                                 
                         1982           29,691,505.11                                 
                         1983           43,738,703.50                                 
                         1984           53,831,713.90                                 
                         1985           85,613,533.00                                 
                         1986           69,331,412.00                                 

          1  The instant case involves several issues, some of which have             
          been settled.  The issues remaining to be decided involve matters           
          that may be classified into four reasonably distinct categories,            
          which the parties have denominated the tax accounting issues, the           
          MACRS depreciation issue, the HealthTrust issue, and the captive            
          insurance or Parthenon Insurance Co. issues.  Issues involved in            
          the first three categories were presented at a special trial                
          session, and the captive insurance issues were severed for trial            
          purposes and were presented at a subsequent special trial                   
          session.  Separate briefs of the parties were filed for each of             
          the distinct categories of issues.  In a Memorandum Opinion                 
          issued Mar. 7, 1996, Hospital Corp. of America v. Commissioner,             
          T.C. Memo. 1996-105, and an Opinion issued Sept. 12, 1996,                  
          Hospital Corp. of America v. Commissioner, 107 T.C.     (1996),             
          we addressed two of the tax accounting issues.  The instant                 
          opinion addresses the last of the tax accounting issues and                 
          specifically involves taxable years ended 1987 and 1988, which              
          were not involved in T.C. Memo. 1996-105 (but 1987 was involved             
          in Hospital Corp. of America v. Commissioner, 107 T.C.                      
          (1996)).  Other issues will be addressed in one or more separate            
          opinions subsequently to be released.                                       




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