Nestle Holdings, Inc. - Page 10




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            Their deficiency and overpayment computations follow below:                                
                                    Respondent’s 1985                                                  
                                    Deficiency Computation1                                            
                        Tax liability                       $45,560,035                                
                        Tax on return     $328,175                                                     
                        Amounts assessed                                                               
                        as a deficiency     86,323,660                                                 
                        Tax assessed                                                                   
                        and paid             286,651,835                                               
                        -Reductions          (49,907,010)                                              
                        -Net tax assessed and paid          (36,744,825)                               
                        Deficiency                          8,815,210                                  


                                         Petitioner’s 1985                                            
                                      Overpayment Computation1                                        
                        Tax assessed and paid              2$86,651,835                                
                        -Tax liability                      (45,560,035)                               
                        Overpayment                         41,091,800                                 
                              1  We have slightly altered respondent’s and                             
                        petitioner’s presentations for comparison                                      
                        purposes.                                                                      
                              2  Petitioner made a $328,175 payment with its                           
                        1985 tax return and a $114,964,176 payment in                                  
                        anticipation of our 1996 decision.  Petitioner’s                               
                        tax assessed and paid of $86,323,660 is net of                                 
                        $28,640,516 returned to petitioner by respondent                               
                        (i.e., $328,175 + $114,964,176 - $28,640,516).                                 
                  The parties agree that petitioner’s tax liability for 1985                           
            equals $45,560,035, but they interpret the 1996 and 1999                                   
            stipulations differently in determining the deficiency and/or                              
            overpayment for 1985.  Although the NOL carrybacks, which                                  

                  11(...continued)                                                                     
            characterize the sum of the amount shown as a tax on the return                            
            and the amounts previously assessed as a deficiency as the “tax                            
            assessed and paid” by petitioner.  We use the same terminology in                          
            this opinion as a shorthand reference to the sec. 6211(a)(1)                               
            figure.  Using a computational format, a deficiency may therefore                          
            be expressed as follows:                                                                   
                  Tax liability - (tax assessed and paid - rebates).                                   




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Last modified: May 25, 2011