Riggs National Corporation & Subsidiaries - Page 2




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                SUPPLEMENTAL MEMORANDUM FINDINGS OF FACT AND OPINION                  

               JACOBS, Judge:  This case is before us on remand from the              
          Court of Appeals for the District of Columbia Circuit.  See Riggs           
          Natl. Corp. & Subs. v. Commissioner, 163 F.3d 1363 (D.C. Cir.               
          1999), revg. and remanding 107 T.C. 301 (1996).                             
               The crux of the dispute involves petitioner’s entitlement to           
          foreign tax credits under section 9011 during years 1984 through            
          1986 for Brazilian income tax purportedly withheld and paid by              
          Banco Central do Brasil (the Central Bank) with respect to its              
          restructuring debt interest remittances to petitioner.  The                 
          specific issues for decision are:  (1) Whether the Central Bank in          
          fact paid withholding taxes on petitioner’s behalf; and if so, (2)          
          whether the Brazilian withholding tax potentially creditable to             
          petitioner must be reduced by the amount of any subsidies that the          
          Central Bank may have received.                                             
               In Riggs Natl. Corp. & Subs. v. Commissioner, 107 T.C. at 360          
          (Riggs I), we concluded that petitioner was not “legally liable”            
          for purported Central Bank withholding tax payments, since we               
          determined that the Central Bank was not required, under Brazilian          
          law, to pay withholding tax on its restructuring debt interest              
          remittances to petitioner.  We further determined that the                  
          withholding tax purportedly paid by the Central Bank on its                 


               1    All section references are to the Internal Revenue Code           
          for the years in issue.                                                     





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