- 58 -
audits took place at petitioner's hub and delivery center
operations. Petitioner's special controlled parcel handling
procedure with respect to high-value packages constituted extra
services for shipments whose declared value exceeded $100.
Petitioner did not reduce the amount transferred to NUF in return
for performing the controlled parcel handling procedures and did
not otherwise charge NUF or OPL for performing these activities.
Before January 1, 1984, petitioner performed all the
functions and activities related to the EVC's and was liable for
the damage or loss of packages up to their declared value. After
January 1, 1984, petitioner continued to perform all the
functions and activities related to EVC's, including billing for
and receiving EVC's, and remained liable to shippers whose
shipments were damaged or lost while in petitioner's possession.
Petitioner continued to receive shippers' claims for lost or
damaged goods, investigate and adjust such claims, and pay such
claims out of the EVC revenue that it had collected from
shippers. The difference between petitioner's EVC activity
before and after January 1, 1984, was that after that date it
remitted the excess of EVC revenues over claims paid, i.e., gross
profit, to NUF, which, after subtracting relatively small
fronting fees and expenses, paid the remainder to OPL, which was
essentially owned by petitioner's shareholders.
Page: Previous 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 NextLast modified: May 25, 2011