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OPINION
SWIFT, Judge: For 1992 and 1993, respectively, respondent
determined deficiencies of $3,094,736 and $2,184,916 in
petitioner's Federal income taxes.
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.
After settlement of some issues, the issue for decision is
whether “savings” relating to “coordination of benefits” between
petitioner and other health insurance companies qualify under the
transition rule of the Omnibus Budget Reconciliation Act of 1990
(OBRA 1990), Pub. L. 101-508, section 11305(c)(3), 104 Stat.
1388-452. If not, we must decide whether the claimed “special”
deductions relating thereto are allowable under the safe harbor
rule of section 1.832-4(f)(2), Income Tax Regs.
We combine our findings of fact and opinion. Some of the
facts have been stipulated and are so found.
During the years in issue, petitioner constituted an
affiliated group of companies engaged in the business of
providing medical health insurance to individuals and businesses.
At the time the petition was filed, Blue Cross & Blue Shield of
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Last modified: May 25, 2011