-3-
2. The Dairy Association ................ 8
3. Petitioner's Sales to Winn-Dixie and Others ..... 9
4. Competition .................... 11
5. Diseases ..................... 11
6. Petitioner's Environmental System ......... 13
C. Petitioner's Finances ................. 14
1. Petitioner's Capital Expenditures Program ..... 14
2. The Super Trust .................. 19
3. Petitioner's Expansion Plans ........... 21
4. Insurance ..................... 22
5. Petitioner's Financial Condition ......... 25
6. Petitioner's Bardahl Calculations ......... 28
7. Petitioner's Business Practices .......... 29
II. Opinion
A. Accumulated Earnings Tax ................ 30
1. Basic Rules .................... 30
2. Burden of Proof .................. 31
B. Whether Petitioner Was Formed or Availed of To Avoid
Shareholder Level Taxation ............... 32
1. Whether Petitioner Intended To Avoid Shareholder
Level Taxes .................... 32
2. Factors Identified in Treasury Regulations .... 35
3. Conclusion .................... 37
C. Reasonable Accumulation for Business Needs ....... 38
1. Background .................... 38
2. Herd Expansion and Pollution Control ....... 40
3. Capital Improvements ............... 43
4. Debt Retirement .................. 46
5. Self-Insurance for Replacement of Herd ...... 48
D. Conclusion ....................... 50
E. Environmental Tax ................... 51
F. Negligence ....................... 51
I. FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
A. Petitioner and the Gustafson Family
1. Petitioner
Petitioner is a Florida corporation the principal place of
business of which was in Green Cove Springs, Florida, when it
filed its petition in this case. Petitioner produces raw milk
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Last modified: May 25, 2011