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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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