Hospital Corporation of America and Subsidiaries - Page 3

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          TYE                       Deficiency                                        
          1978                     $2,187,079.00                                      
          1980                        388,006.58                                      
          1981                     94,605,958.92                                      
          1982                     29,691,505.11                                      
          1983                     43,738,703.50                                      
          1984                     53,831,713.90                                      
          1985                     85,613,533.00                                      
          1986                     69,331,412.00                                      
          1987                    294,571,908.00                                      
          1988                     25,317,840.00                                      
          Unless otherwise indicated, all section references are to the               
          Internal Revenue Code in effect for the years in issue, and all             
          Rule references are to the Tax Court Rules of Practice and                  
          Procedure.                                                                  
               The issues to be decided are:                                          
               (1)  Whether Parthenon Insurance Co. (Parthenon), a wholly             
          owned subsidiary of petitioner Hospital Corporation of America              
          (HCA), is an insurance company within the meaning of the Internal           
          Revenue Code; and                                                           
               (2)  if Parthenon is an insurance company, what portion of             
          its unpaid loss reserves and expenses are deductible pursuant to            
          section 832(c).2                                                            


          2  In accordance with the holding of the Court of Appeals for               
          the Sixth Circuit in Humana Inc. v. Commissioner, 881 F.2d 247              
          (6th Cir. 1989), affg. in part and revg. in part 88 T.C. 197                
          (1987), petitioners seek deductions only for reserve additions              
          attributable to reserves for claims against Parthenon's sister              
          subsidiaries, and not for reserve additions attributable to                 
          reserves for claims against HCA itself.  Absent stipulation of              
          the parties to the contrary, our decision in the instant case is            
          appealable to the Sixth Circuit.                                            




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