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by the same law firm during the negotiation and signing of the
tax indemnification agreement.
The agreement begins by setting forth the premise that prior
to the restructuring, petitioner was the common parent of the
affiliated group of which Interlake and its subsidiaries were
members. The agreement states that, after the restructuring,
Interlake succeeded petitioner as the common parent of the
affiliated group of which Interlake, petitioner, and their
subsidiaries were members.
Paragraph 4 of the agreement, entitled “Responsibility for
Federal Corporate Income Tax Examination and Proceedings Relating
Thereto”, grants Interlake sole responsibility and authority to
handle all Federal income tax matters for all tax years or
periods of petitioner or of any subsidiary of petitioner ending
on or before the restructuring. Paragraph 4 identifies Interlake
as the common parent of the affiliated group under section
1.1502-77, Income Tax Regs.
Paragraph 5 of the agreement, entitled “Responsibility for
Federal Corporate Income Taxes Attributable to Taxable Years or
Periods Ending After the Effective Date”, provides that Interlake
shall be solely responsible for all corporate income taxes with
respect to the businesses carried on by Interlake and its
subsidiaries and, subject to paragraph 6(b), be entitled to all
refunds attributable thereto. Paragraph 5 goes on to provide
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Last modified: May 25, 2011