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We hold that petitioner has set forth sufficient details in
its statement to show the basis of its grounds for accumulating
earnings in the amount of $1,800,000 to build a second facility.
Petitioner's grounds support the alleged business needs for the
accumulation and provide a sufficient basis for respondent to
prepare for trial. We conclude that respondent's arguments
concerning the details of constructing a second facility should
be interposed at trial and need not be addressed in deciding the
instant motion. Accordingly, we conclude that, as to the second
ground presented by petitioner, the burden of proof is on
respondent.
3. Retail Expansion To Accommodate Production Expansion
Petitioner's next ground is that it reasonably accumulated
earnings of $1 million for each of the taxable years in issue for
the retail expansion required to accommodate the increased
production from the first facility and the planned, second Costa
Rican manufacturing facility. Petitioner states that, consistent
with its usual practice, petitioner decided to finance the
expansion through its surplus earnings instead of borrowed funds
and points to its corporate minutes dated August 13, 1992, where
the directors resolved "That every effort be made to search for
and locate new sites to build free standing stores to utilize the
increased production of the factory in Costa Rica." Petitioner
states that it immediately began to locate sites to accommodate
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