- 3 - deductible. If the $940,000 represents a payment of double damages, a further genuine issue of fact exists as to whether the parties intended the payment to compensate the government for its losses (deductible) or to punish or deter Talley and Stencel (nondeductible). [Citation omitted.] Id. FINDINGS OF FACT Stencel Aero Engineering Corp. (Stencel), a wholly owned subsidiary of Talley Industries, Inc. (Talley or petitioner), manufactured ejection seats for military aircraft. During the early 1980's, Stencel's primary customer was the U.S. Department of the Navy (Navy Department). Stencel's work for the Navy Department involved both the production of ejection seats and research and development projects (R&D projects). Stencel's employees generally were required to maintain daily timecards showing the number of hours devoted to specific production contracts or R&D projects. Stencel used the data from these records to determine its costs under a particular production contract or R&D project, and, in the case of all contracts with the Navy Department, those data were incorporated, directly or indirectly, in the invoices or requests for progress payments that Stencel submitted to the Navy Department. On December 20, 1984, the Defense Criminal Investigative Service executed a search warrant at Stencel's plant in Arden, North Carolina, and seized certain of Stencel's records, including certain employee timecards. On March 8, 1985, aPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
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