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In the instant case, for the taxable years in issue, LTD
failed to file timely, true, and accurate returns pursuant to
section 882(c)(2). In our prior opinion, we held that,
consistent with Blenheim Co. v. Commissioner, 125 F.2d 906 (4th
Cir. 1942), and Georday Enters., Ltd. v. Commissioner, 126 F.2d
384 (4th Cir. 1942), LTD is precluded from receiving the benefits
of any deductions that it might have otherwise been entitled to
claim pursuant to section 882(c)(1)(A) had it filed a timely,
true, and accurate return pursuant to section 882(c)(2). See
Espinosa v. Commissioner, 107 T.C. 146 (1996). In the instant
case, the form of the section 482 correlative adjustment to LTD's
income would be an increase in the amount that LTD would be
entitled to deduct pursuant to section 882(c)(1)(A). In our
prior opinion, however, we concluded that, because LTD failed to
file timely, true, and accurate returns pursuant to section
882(c)(2), correlative adjustments to LTD's income, which take
the form of deductions pursuant to section 882(c)(1)(A), were not
appropriate for the taxable years in issue.
In their motion, petitioners elaborate on the argument which
they made on brief regarding the correlative adjustments and
contend that the regulations absolutely mandate that, when the
income of one member of the group is increased, the correlative
14(...continued)
may be appropriate under the circumstances. [Emphasis
added.]
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