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History of the Consolidated Cases
By notices of deficiency dated December 29 and 31, 2000 (the
notices of deficiency), respondent determined deficiencies in the
Federal income taxes of petitioners for the audit years.
Explanations included with the notices of deficiency show
adjustments to petitioners’ incomes resulting from changes in the
treatment of items of ACC passed through to Blasius and Balan on
account of their status as shareholders of ACC. Respondent
required the capitalization of certain costs incurred (and
deducted) by ACC in connection with (1) “Loan Origination/
Acquisition”, (2) “Offering Expenses”, and (3) “Professional
Fees”.
On March 30, 2001, petitions were filed in the cases (the
petitions), and, on May 21, 2001, respondent answered the
petitions denying all assignments of error.
On January 9, 2002, the Court notified the parties that the
cases were set for trial at the trial session of the Court
commencing June 10, 2002, in Detroit, Michigan.
On March 14, 2002, attorney Oksana O. Xenos, on behalf of
all petitioners, wrote a letter to Eric R. Skinner, one of
respondent’s counsel in this case. In that letter, Ms. Xenos
requested that, in light of respondent’s position regarding the
deductibility of the types of costs at issue in the consolidated
cases, as stated in Announcement 2002-9, 2002-1 C.B. 536, issued
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Last modified: May 25, 2011