American Stores Company and Subsidiaries - Page 10

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          $44,063,665 deducted by petitioner on Schedule M-1 related to               
          covered services performed after the end of TYE 8801.                       
               For taxable years after TYE 8801, petitioner reported                  
          deductions based upon contributions attributable to covered                 
          services performed during the taxable year (but not previously              
          deducted for tax purposes), as well as contributions attributable           
          to covered services performed after the close of the taxable                
          year, where the contributions were made before the filing date              
          for petitioner's Federal income tax return.  In contrast to TYE             
          8801, for taxable years before and after TYE 8801, petitioner               
          deducted only contributions calculated with reference to covered            
          services performed over a 12-month period.  At no time did                  
          petitioner file a Form 3115 (Application for Change in Accounting           
          Method) concerning the method used to arrive at its deduction for           
          contributions to the plans claimed on its return for TYE 8801.              
               In her notice of deficiency, respondent disallowed the                 
          $44,179,950 Schedule M-1 adjustment upon determining that                   
          petitioner could not properly deduct contributions attributable             
          to covered services performed after the close of the taxable year           
          as so-called grace period contributions.  Respondent did not                
          disallow the $57,607,463 deduction representing contributions               
          made by petitioner to the plans attributable to covered services            
          performed during TYE 8801.                                                  








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Last modified: May 25, 2011