114 T.C. No. 36 UNITED STATES TAX COURT FLORIDA PROGRESS CORPORATION & SUBSIDIARIES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 2961-97. Filed June 30, 2000. U, a public utility filing consolidated Federal income tax returns with P, engaged in the retail and wholesale distribution of electricity and related services. Federal income tax rates were reduced in 1986 pursuant to the Tax Reform Act of 1986, Pub. L. 99-514, sec. 821, 100 Stat. 2372, creating an excess in deferred Federal income tax collected from customers of U. U was required to adjust utility rates in 1987 and 1988 to compensate for this overcollection. U was allowed to collect funds equal to its projected fuel and energy conservation costs. Pursuant to regulatory law, monthly collections remained fixed over a 6-month recovery period in order to decrease the volatility of customers’ bills. 1. Held, U’s rate reductions from 1987 through 1990 to compensate for excess deferred Federal income tax are not deductible business expenses within thePage: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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