- 5 -
5. Discussion of Dividend Income ........ 191
D. Whether LTD Is Entitled to Deductions ....... 194
1. Law ..................... 194
2. Discussion .................. 195
E. Whether Income Should Be Allocated
Pursuant to Section 482 . . . . . . ........ 199
1. Background .................. 199
2. Law ..................... 200
a. Section 482 in General ......... 200
b. The Section 482 Regulations ....... 203
3. Discussion .................. 208
F. Remaining Issues ................. 231
1. Positions of the Parties ........... 231
2. Issues With Respect to LTD .......... 232
3. Issues With Respect to INC .......... 232
4. Issues With Respect to Holdings ....... 232
G. Additions to Tax ................. 233
1. Section 6651(a)(1) .............. 233
2. Sections 6653(a)(1) and 6653(a)(1)(A) .... 237
3. Section 6655(a) ............... 241
4. Section 6656(a) ............... 241
5. Section 6661(a) ............... 243
MEMORANDUM FINDINGS OF FACT AND OPINION
WELLS, Judge: Respondent determined deficiencies in and
additions to InverWorld, Ltd.'s (LTD) withholding tax as follows:
InverWorld, Ltd., Docket Nos. 27090-90, 3443-93
Additions to Tax
Sec. Sec. Sec. Sec.
Year Deficiency 6651 6653(a)(1) 6653(a)(2) 6656
1984 $4,891,617 $1,222,904 $244,581 1 $489,162
1985 10,119,885 2,529,971 505,994 1 1,011,988
Additions to Tax
Sec. Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6653(a)(1)(A) 6653(a)(1)(B) 6656
1986 13,506,793 3,376,698 675,340 1 1,350,679
1987 733,420 183,355 36,671 1 73,342
Additions to Tax
Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6653(a)(1) 6656
1988 1,524,928 381,232 76,246 152,493
1989 2,951,566 737,891 --- 295,157
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