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consolidated Federal income tax returns (e.g., the companies that
constituted members of the former INA and PHC Groups).
Petitioners cite portions of the Department of the Treasury
(Treasury) administrative files under section 1.1502-47(m)(3) and
(4), Income Tax Regs., that suggest that the insurance industry
in general and petitioners in particular were engaged with
respondent and the Treasury over a period of years in extensive
discussions regarding whether a separate or a single entity
method should be adopted and reflected in the regulations with
regard to the treatment of losses of ineligible nonlife companies
that constituted part of a previously affiliated and consolidated
group. Portions of the referenced administrative files also
reflect positions or recommendations of various Government
officials about the separate or single entity method and indicate
that some Government officials at one time or another favored a
single entity method.
Petitioners argue that the administrative files establish
that, in the regulations, the Treasury and respondent never
adopted a final decision as to how to treat losses of ineligible
nonlife companies that constituted part of a previously
affiliated and consolidated group and that the “reserved”
subparagraph (4) under section 1.1502-47(m), Income Tax Regs.,
was intended to preserve this issue until that subparagraph was
promulgated.
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Last modified: May 25, 2011