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OPINION
VASQUEZ, Judge: Respondent determined a deficiency of
$339,076,705 in petitioner's 1985 consolidated Federal income
tax. The issues in this case, the rate support and special tools
issues, have been bifurcated for separate resolution. This
opinion addresses the rate support issues.
After concessions by the parties,1 the issues for decision
are: (1) Whether General Motors Corporation (GM) and its
consolidated affiliated subsidiaries (together, the GM group)
changed its method of accounting, and (2) whether section 1.1502-
13(b)(2), Income Tax Regs., requires GM to defer its deduction of
"rate support" payments.2
1 Petitioner concedes that for 1985 it is not entitled to
deduct (1) $57,532,843 for retail rate support payments incurred
by GM, (2) $233,071,869 for retail rate support payments GM did
not bill until 1986, and (3) $1,557,226 for fleet rate support
payments GM did not bill until 1986. Respondent concedes that
for 1985 (1) petitioner's income should not be increased by
$119,004,997 on account of estimated refunds of retail rate
support payments, and (2) petitioner is entitled to $13,572,139
in deductions for fleet rate support payments.
Additionally, the parties agree that petitioner, in
computing its taxable income for 1985, is entitled to claim
foreign tax credits in the amount of $101,000,636 arising from
carrybacks from 1986 and 1987.
2 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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Last modified: May 25, 2011