- 2 -
MEMORANDUM FINDINGS OF FACT AND OPINION
RUWE, Judge: Respondent determined deficiencies in
petitioner's Federal income taxes and additions to tax as
follows:
Additions to Tax
Year Deficiency Sec. 6653(a)(1) Sec. 6653(a)(2) Sec. 6661
1983 $2,330,687 -- -- --
1984 64,870,674 $3,243,534 50% of the $11,280,731
interest due
on $45,122,925
Respondent also determined that petitioner is liable for
increased interest pursuant to section 6621(c)1 on the portion of
the 1984 deficiency attributable to respondent's determination
that excess value charges are includable in petitioner's income.
After concessions,2 the issues for decision are:
1Unless 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.
2Respondent concedes that $8,855,121 of income earned on
funds invested by Overseas Partners, Ltd. (OPL), is not income to
petitioner pursuant to sec. 482. Respondent determined that if
petitioner must include excess value charges in gross income,
petitioner is entitled to a corresponding deduction of
$32,543,889 for shippers' claims.
Respondent concedes that $325,740 of the $1.2 million paid
Liberty Mutual Insurance Group (Liberty Mutual) for claims
adjustment services is deductible. Respondent further concedes
the deductibility of $50,000 paid by petitioner to Liberty Mutual
for the retained layer of liability for losses above $250,000.
These concessions reduce the amount of the deduction at issue
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011