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Turner P. Smith and Nancy E. Delaney, for petitioners in
docket Nos. 3441-93, 3442-93, 3443-93, and 3444-93.
Jill Frisch, Peter J. Graziano, and Maria Stabile, for
respondent.
SUPPLEMENTAL MEMORANDUM FINDINGS OF FACT AND OPINION
WELLS, Judge: These cases are before us on petitioners'
motion pursuant to Rule 1612 for reconsideration of our prior
Memorandum Opinion, T.C. Memo. 1996-301 (prior opinion). In our
prior opinion, as to InverWorld, Ltd. (LTD), we held, inter alia,
that LTD was engaged in trade or business within the United
States pursuant to section 864(b), that a certain portion of
LTD's income was effectively connected with the conduct of such
trade or business pursuant to section 864(c), that LTD was liable
for corporate income tax pursuant to section 882(a), and that LTD
was liable for additions to tax pursuant to sections 6651, 6653,
6655, and 6656. As to InverWorld, Inc. (INC),3 we held, inter
alia, that income was to be allocated from LTD to INC pursuant to
2 Unless otherwise indicated, all Rule references are to the
Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code in effect for the
years in issue.
3 For INC's taxable years ended June 30, 1987, 1988, and 1989,
INC was joined in the consolidated income tax returns filed by
InverWorld Holdings, Inc. (Holdings), which was the owner of all
of the outstanding stock of INC. Accordingly, respondent's
income allocations to INC pursuant to sec. 482 affect the income
tax liability of Holdings. For convenience and clarity, we make
reference to INC only and include Holdings in such references.
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