- 3 -
AIC Holding Co. and Subsidiaries
Taxable year Penalty
ending Deficiency sec. 6689
Dec. 31, 1976 $659,483 ---
Dec. 31, 1977 1,798,443 ---
Dec. 31, 1978 1,420,787 ---
Dec. 31, 1979 3,160,729 ---
Dec. 31, 1980 12,418,363 $23,145
Dec. 31, 1981 10,660,213 5,227
Dec. 31, 1982 3,885,657 ---
Dec. 31, 1983 4,024,241 ---
The issues relating to section 482,3 the subject of this
opinion, have been severed from the other issues in these cases.
The issues presented for our consideration are:
(1) Whether respondent’s allocations of income (a) for the
use of the Hyatt trade name and marks by Hyatt International
Corp. (HIC) and its subsidiaries, and (b) for management services
HIC provided to its subsidiaries were arbitrary, capricious, or
unreasonable; and
(2) the amount of arm’s-length consideration, if any, for
such transactions.
3 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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