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Petitioner did not make available to respondent any
advertising copy, press releases, brochures, videos, or other
documents distributed to third parties concerning the services
offered by either petitioner or ASAT, Ltd., during the years
ending April 30, 1989, through April 30, 1992.
During the examination, Ms. Hamilton requested information
regarding how petitioner's gross profit spread was set on sales
of ASAT, Ltd.'s, assembly services. Neither petitioner nor ASAT,
Ltd., provided any documentation to Ms. Hamilton regarding how
petitioner's gross profit spread was set on sales of ASAT,
Ltd.'s, assembly services. Petitioner did not provide Ms.
Hamilton with any information as to which company, petitioner or
ASAT, Ltd., set the gross profit spread.
During the examination, petitioner did not provide
respondent with any documentation on petitioner's anticipated
costs, profits, or break-even points from its transactions with
ASAT, Ltd. We cannot tell whether this information was not
available or was not in existence. Petitioner did not provide
Ms. Hamilton with an analysis or projection of income or expenses
for petitioner. Petitioner did not know what commission rate it
would need to charge ASAT, Ltd., in order to be profitable.
D. Application of Section 6038A
The Internal Revenue Manual provides procedures for the use
and application of section 6038A. Ms. Hamilton followed the
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