Becker Holding Corporation and Subsidiaries - Page 4

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               On April 8, 2002, Mr. Leonard, on behalf of petitioner,                
          wrote a letter to Mr. Kaufman proposing, inter alia:                        
               Of the $5,307,600 which remains in dispute regarding the               
               covenant not to compete signed by William Becker, 85% (or              
               $4,511,460) would be allowed as a deduction for the 1996               
               fiscal year.  This would increase the net operating loss for           
               1996.  A net operating loss carryback of $4,511,460 would be           
               taken for the 1993 fiscal year.                                        
               On April 18, 2002, Mr. Kaufman wrote a letter to Mr. Leonard           
          which stated:                                                               
               I have considered your settlement proposal in your faxed               
               letter to me of April 8, 2002.  My response is as follows:             
                    •      I am willing to allow 80% of the remaining                 
                           $5,307,000 ($4,246,000) as a deduction in the              
                           1996 fiscal year.                                          
                    •      I believe that the 1993 fiscal year is open only           
                           under a loss carryback and thus the originally             
                           claimed 1995 bad debt could not be claimed in              
                           that year.                                                 
                    •      Unless the 1997 fiscal year loss has already               
                           been examined by the Examination Division, I               
                           cannot allow anything at this time.  You may be            
                           able to file a carryback subsequently.                     
                    •      The rest of your proposal would be acceptable.             
               On May 28, 2002, Mr. Leonard wrote a letter to Mr. Kaufman             
          enclosing duplicate executed Forms 872-A, Special Consent to                
          Extend the Time to Assess Tax, which stated:                                
               Enclosed please find two executed Special Consent to Extend            
               the Time to Assess Tax.  As we have discussed, it appears              
               that the sole issue impeding our resolution of this matter             
               is the carryback of net operating loss from 1997 to 1995.  I           
               will forward to you within the next week my research which             
               indicates that the 1997 loss is required to be taken in 1995           
               if 1995 is an open year.  This letter will also confirm our            
               discussion that 1993 remains an open year for the purpose of           





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