9
Based on the 1985 Detariffing Notice, the 1986 Detariffing
Order, and the changed accounting system, the TAM concluded
that the billing and collection function is a
"financial and administrative service." The functions
comprising billing and collection (data processing,
creating, mailing and collecting invoices), are common
accounting functions, not unique to the telephone
industry. * * * A "financial and administrative
service" which credit card companies can perform as
ably as LECs [local exchange carriers], cannot be a
"communication service involving the completion of long
distance calls." Treas. Reg. sec. 1.501(c)(12)-1(c).
* * * [Fn. ref. omitted.]
Id. Because the IRS concluded in the TAM that telephone
cooperatives provide B & C services in the same manner as other
nonexempt organizations, it ruled that B & C income is unrelated
trade or business income of the cooperative. Id. Recognizing
that the TAM "may have caused the inadvertent disqualification of
many telephone companies from tax exempt status", the IRS, in
Notice 92-33, 1992-2 C.B. 363, indicated that it would apply the
new provisions of the TAM for tax years beginning after December
31, 1990. Thus, the IRS seeks to apply the TAM for the years at
issue here, namely, 1991, 1992, and 1993.
Meanwhile, in 1989, the FCC issued another decision, In the
Matter of Pub. Serv. Commn. of Md., 4 FCC Rcd 4000 (1989) (1989
FCC Decision), in which it softened the position it had taken in
the 1986 Detariffing Order. The decision stated:
Billing and collection services of the kind
provided by C&P for AT&T directly affect the conditions
under which interstate carriers offer transmission
services. The rates that LECs [local exchange
carriers] charge for billing and collection directly
affect the costs of providing interstate transmission
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