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meaning of sec. 1341, I.R.C., and, therefore, P is not
entitled to the beneficial treatment of sec. 1341.
2. Held, further, overcollections for fuel and
energy conservation costs are not income to P under
sec. 61 because U acquired funds subject to an
unconditional obligation to repay.
David E. Jacobson and Richard P. Swanson, for petitioner.
James F. Kearney, for respondent.
OPINION
COHEN, Judge: Respondent determined deficiencies in
petitioner’s consolidated Federal income tax for 1986, 1987, and
1988 in the amounts of $1,356,802, $1,321,896, and $7,099,160,
respectively.
After concessions by the parties, the issues for decision
are: (1) Whether one of petitioner’s subsidiaries is entitled to
compute its tax liability for 1987 and 1988 pursuant to section
1341 and (2) whether funds overcollected pursuant to fuel and
energy conservation cost recovery rates constitute income under
section 61.
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.
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