Union Carbide Corporation and Subsidiaries - Page 7

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          petitioner's claims for additional FSC commissions were not made             
          within the time prescribed by the Regulation.                                
               On August 21, 1996, petitioner advised respondent of its                
          intent to amend the petition a second time (second amendment) to             
          claim additional FSC commission expenses for its 1987, 1988, and             
          1989 tax years (over and above those claimed in the first                    
          amendment) attributable, among other things, to its use of the               
          "transaction-by-transaction" method of determining FSC profits               
          under section 1.925(a)-1T(c)(8), Temporary Income Tax Regs., 52              
          Fed. Reg. 6446 (Mar. 3, 1987), instead of a determination of FSC             
          profit based on product groupings, as previously used on                     
          petitioner's returns.  The second amendment, filed on October 24,            
          1996, claimed additional FSC commissions in the amounts of                   
          $1,598,757, $8,911,740, and $28,106,979, for 1987, 1988, and                 
          1989, respectively.  On December 4, 1996, respondent filed an                
          answer to the second amendment, again denying petitioner's claims            
          because they were not asserted within the time prescribed by the             
          Regulation.                                                                  
               On August 20, 1996, UCFSC filed amended returns for its                 
          1987, 1988, and 1989 tax years, reporting additional FSC                     
          commission income in the amounts of $19,176,799, $27,550,019, and            
          $51,218,650, respectively, and resulting additional income tax               
          due.  (These amounts match the total amounts of additional FSC               
          commission expenses claimed by petitioner in its two amendments              
          to the petition.)  Respondent rejected UCFSC's amended returns,              




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