- 4 -
position was in error and that petitioner is entitled to the
deduction it had claimed for 1989.4
Petitioner seems willing to accept respondent’s concession
but continues to assert that it is entitled to more than the
$932,979 claimed on its 1989 Federal return. To sort out the
motion for reconsideration, we must consider the somewhat
complicated underlying factual background for respondent’s
position and his change in position.
California franchise tax, before the 1972 law, was generally
measured by the prior year’s income and accrued on January 1 of
the reporting year. For example, a 1970 California franchise tax
obligation and the resulting amount deductible for 1970 Federal
4 Respondent contends that he made a concession and changed
his position in the final posttrial brief (reply brief). In his
reply brief, however, respondent, after stating that his overall
position on the franchise tax issue was correct, merely stated:
“The position in the notice of deficiency, allowing a $932,979
deduction for 1989, is correct.” There was no explanation as to
the theory underlying respondent’s change of mind, and there was
no explanation as to how respondent’s “concession” may have
changed or affected respondent’s overall position on the primary
issue. Respondent’s alleged concession was without a legal basis
for allowing petitioner the deduction and did not clearly or
concisely concede the $932,979 amount. Respondent simply stated
that the position in the notice was correct. The notice,
however, contains no rationale for allowing or disallowing any
part of the franchise tax deduction claimed for 1989. From the
Court’s point of view this “concession” was not obvious or
appropriate. It was inappropriate because petitioner had based
its trial and briefing position on respondent’s arguments at
trial and in his original brief, and petitioner did not have a
chance to respond to respondent’s ineffective attempt to concede
in his reply brief.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011