Golden Belt Telephone Association, Inc. - Page 1

                                   108 T.C. No. 23                                    

                               UNITED STATES TAX COURT                                

               GOLDEN BELT TELEPHONE ASSOCIATION, INC., Petitioner v.                 
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 21677-95.              Filed June 16, 1997.                 

                    P is a rural telephone cooperative corporation                    
               that operates at cost.  In addition to local telephone                 
               service it provides its members with long-distance                     
               service through connection with long-distance or                       
               interstate (interexchange) carriers.  P performs so-                   
               called "billing and collection" (B & C) services in                    
               respect of calls placed through such carriers.  The                    
               B & C services consist of recording data with respect                  
               to members' long-distance calls, such as date, time,                   
               destination, and duration of each call, answering and                  
               resolving questions of members relating to their long-                 
               distance bills, etc., and sending a single monthly                     
               telephone bill to each member including charges for                    
               both local and long-distance calls.  Upon collection of                
               such charges it remits to the interexchange carrier an                 
               appropriate portion of the amount paid for long-                       
               distance calls.  By retaining the remainder it is thus                 
               compensated by the long-distance carrier for providing                 
               B & C services.                                                        

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