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concerning petitioner’s entitlement to a $932,979 deduction for
California franchise tax for its 1989 Federal tax year.
Respondent has not changed his position concerning our primary
holding. Respondent continues to agree with our primary holding
that section 461(d)3 applies to a 1972 legislative amendment by
the State of California (1972 law). Under the primary holding,
we concluded that section 461(d) applies because the 1972 law
resulted in an acceleration of the accrual of California State
franchise tax.
Respondent has, however, changed position regarding the
question of whether petitioner is entitled to a $932,979
franchise tax deduction claimed on its 1989 calendar year Federal
return. For purposes of trial and briefing, respondent argued
that if the 1972 law triggered the application of section 461(d),
petitioner would not be entitled to the $932,979 California
franchise tax deduction claimed on its Federal return for 1989.
In his motion for reconsideration, respondent concedes that his
2(...continued)
regimen. As a result of that holding, it was also held that
petitioner was not entitled to a $932,979 deduction for
California franchise tax it claimed for its 1989 Federal tax
year.
3 All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
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Last modified: May 25, 2011