Bank One Corporation - Page 79

                                        -162-                                         
               Petitioner attempts in its opening brief to raise an issue             
          that its methodology is permissible for 1990 through 1992                   
          because, it asserts, that methodology met the reasonableness                
          requirement of Notice 89-21, 1989-1 C.B. 651.  Notice 89-21,                
          1989-1 C.B. at 652, clarifies that swaps income from lump-sum               
          payments should be spread over the life of the swap “using a                
          reasonable method of amortization.”  We decline to consider this            
          issue.  Petitioner has raised the issue on brief in violation of            
          our August 14, 2000, order, see Estate of Maggos v. Commissioner,           
          T.C. Memo. 2000-129 (Court held that a party would not be                   
          entitled to raise an issue not set forth in a memorandum filed by           
          that party in response to a similar order of this Court), and we            
          find credible respondent’s assertion on brief that he justifiably           
          relied upon our August 14, 2000, order in preparing for and                 
          conducting the trial of this case.  We also agree with respondent           
          that he would be prejudiced were we now to decide whether                   
          petitioner’s method of accounting for its 1990 through 1992 swaps           
          income met the reasonableness requirement of Notice 89-21, supra.           
          II.  Does Section 475 Involve a Method of Accounting?                       
               A.  Overview                                                           
               For each relevant year, respondent determined that FNBC’s              
          method of accounting for its swaps (more specifically, its                  
          treatment of the adjustments) did not clearly reflect its swaps             
          income.  Accordingly, respondent determined, he was entitled to             






Page:  Previous  152  153  154  155  156  157  158  159  160  161  162  163  164  165  166  167  168  169  170  171  Next

Last modified: May 25, 2011