Lone Star Life Insurance Company - Page 5

                                        - 5 -                                         

          consolidated tax returns for the years 1988 through 1990.  On or            
          about the same date, the District Director issued separate 30-day           
          letters and RAR's to Hibiscus and petitioner proposing similar              
          adjustments to their respective tax liabilities for 1991.  The              
          RAR's included computations reflecting each entity's corrected              
          taxable income for each of the years in issue computed on a                 
          separate tax return basis.  In particular, respondent proposed to           
          determine overpayments with respect to Hibiscus' separate tax               
          liabilities for 1988 through 1991 and deficiencies with respect             
          to petitioner's separate tax liabilities for the same periods.              
          Hibiscus and petitioner filed a joint administrative protest with           
          respect to the proposed adjustments.                                        
               First Notice of Deficiency                                             
               On April 11, 1996, respondent issued a notice of deficiency            
          to petitioner determining deficiencies in its Federal income                
          taxes for the years and in the amounts as follows:                          
                         Year                 Deficiency                              
          1988                               $397,397                                 
          1989                               2,941,341                                
          1990                               4,591,998                                
          1991                               5,658,976                                
          The notice of deficiency includes an explanation of adjustments             
          which states in pertinent part:                                             
                    It is determined that Hibiscus Life Insurance                     
               Company does not qualify as an insurance company under                 
               I.R.C. sec. 816 because not more than half of its                      
               business during the years in question was the issuing                  
               of insurance or annuity contracts or the reinsuring of                 




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011