Dresser Industries, Inc. And Consolidated Subsidiaries v. Commissioner of Internal Revenue

GOLDBERG, Circuit Judge:

Dresser Industries (“Dresser”) petitioned the Tax Court for a redetermination of deficiencies for the 1976 and 1977 tax years which the Commissioner of Internal Revenue (“Commissioner”) alleged resulted from an improper calculation of the combined taxable income attributable to Dresser and its wholly-owned export subsidiary. The Commissioner claimed that Dresser improperly calculated the amount of interest expense allocable to export income pursuant to code sections 994 and 861, and that Dresser failed to directly deduct the discount loss on certain export receivables…