7
petitioner filed a section 534(c) statement or requested an
Appeals Office conference.
D. Petitioner's Section 534(c) Statement
On July 12, 1996, petitioner filed a timely section 534(c)
statement identifying the grounds on which it relied to establish
that it did not unreasonably accumulate earnings. Petitioner
asserted that it had 11 grounds to accumulate earnings: (1) To
provide a reserve for Federal income tax and interest; (2) to
provide working capital; (3) to expand to additional port cities;
(4) to replace equipment; (5) to provide loans to customers or
suppliers; (6) to meet competition; (7) to provide insurance; (8)
to provide a litigation reserve; (9) to prepare for unsettled
business conditions; (10) to make pension and profit sharing plan
contributions; and (11) to respond to the possible loss of its
principal customer, the U.S. Navy.
Petitioner filed its petition in this case on September 9,
1996. On April 9, 1997, this case was calendared for trial at
the September 15, 1997, session of this Court at San Diego,
California.
On April 24, 1997, respondent filed a motion for a ruling
that petitioner's section 534(c) statement was insufficient to
shift the burden of proof to respondent. On July 22, 1997, we
held that petitioner's section 534(c) statement did not contain
enough facts to shift the burden of proof to respondent.
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