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This Court has described the requisite control under section
482 as one of "actual, practical control rather than any particular
percentage of stock ownership." B. Forman Co. v. Commissioner, 54
T.C. 912, 921 (1970), affd. in part and revd. in part 453 F.2d 1144
(2d Cir. 1972). "The language of section 482 is broad and
sweeping, and its application depends on a finding of either
ownership or control." Collins Elec. Co. v. Commissioner, 67 T.C.
911, 918-919 (1977); Ach v. Commissioner, 42 T.C. 114, 125 (1964),
affd. 358 F.2d 342 (6th Cir. 1966).
B. The Parties' Arguments
Respondent asserts that petitioner's income as reported on its
fiscal year 1991 and 1992 Federal income tax returns was
understated because petitioner gave preferential rebates to its
related entities. On the other hand, petitioner argues that the
rebates were proper primarily because the accounts payable from the
related entities were uncollectible. For the reasons set forth
below, we agree with respondent.
C. Petitioner's Controlled Group and the Effect of the
Rebates
Although petitioner, Kapsco, NPC, and KAW were each separate
legal entities, they were related and controlled directly or
indirectly by the same Kirkham family interests during the years at
issue. Given the ownership and management structure of the
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