- 9 - pertained only to the section 936 issue. The cross-motions before us concern only the section 936 issue, and not the FSC issue. On the same date that the restricted consents were executed, respondent issued a "30-day letter" and a revenue agent report (RAR) that followed the adjustments in the NOPA. The RAR made no reference to the recalculation of the combined taxable income. The RAR stated that "The Service is challenging this profit split deduction because the activities in the Puerto Rico facility do not meet the definition of manufacturing as required in IRC 954." Notices of Deficiency On May 9, 1996, respondent issued two notices of deficiency, one for petitioner's 1987, 1988, and 1989 tax years and the other for petitioner's 1991 tax year. A notice was not issued with respect to petitioner's 1990 tax year because respondent's adjustments left petitioner in an overpayment position for that year. However, the 1987, 1988, and 1989 tax year deficiencies relate to excess business and foreign tax credits that arose in 1990. See sec. 6501(h). In the notice of deficiency for the 1991 tax year (the notice before us), respondent determined an $8,810,992 deficiency. The 1991 deficiency arose, in part, because of respondent's disallowance of petitioner's claimed combined taxable income deduction as computed under MS-Puerto Rico's election of the profit-split method. The notice of deficiency stated:Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011