122 T.C. No. 10
UNITED STATES TAX COURT
THE CHARLES SCHWAB CORPORATION AND SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 16903-98, 18095-98. Filed March 9, 2004.
P, for Federal tax reporting purposes, claimed a
California franchise tax deduction for 1989.
Subsequently, P claimed the 1989 deduction for an
earlier year and was successful in that claim in prior
litigation before this Court. For purposes of these
cases, P claims entitlement to franchise tax deductions
for 1989 in the amount originally deducted for 1990.
In like manner, P claims the franchise tax deductions
originally claimed for 1993, 1992, and 1991 are now
deductible for the preceding years of 1992, 1991, and
1990, respectively. R contends that sec. 461(d),
I.R.C., proscribes such deductions because they are
based on 1972 California legislation that provided for
the acceleration of the accrual date for said taxes. P
contends that sec. 461(d), I.R.C., does not proscribe
its franchise tax deductions so long as California’s
1972 legislation does not result in a double franchise
tax deduction for 1989 and/or later years.
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