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shall be the amount determined by the Secretary in the
Secretary's sole discretion from the Secretary's own
knowledge or from such information as the Secretary may
obtain through testimony or otherwise.
5. Contentions of the Parties
Petitioner contends that section 6038A does not apply
because it was not 25 percent owned by a foreign corporation when
respondent requested the authorization of agent on November 25,
1992. Petitioner further contends that Worltek, a domestic
corporation, became a "successor in interest" to ASAT, Ltd., when
Worltek, on July 15, 1992, purchased newly issued stock from
petitioner and became its 95-percent shareholder. Under section
1.6038A-5(e), Income Tax Regs., a "successor in interest to a
related party must execute the authorization of agent as
described in paragraph (b) of this section." Petitioner finally
contends that "Section 6038A is not operative because it was a
legal impossibility for Petitioner to obtain the authorization of
agent." Petitioner argues that since it "exercised considerable
effort to obtain the authorization of agent from ASAT, Ltd., with
no success" and since it did not have the power to compel ASAT,
Ltd., to grant the authorization of agent, then it should not be
penalized under section 6038A(e)(3).
Respondent argues that section 6038A is applicable to
petitioner, as it is undisputed that petitioner was a reporting
corporation during the year ending April 30, 1991. According to
respondent, "the status of a corporation as a 'reporting
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