Hachette Usa, Inc., as Successor to Hachette Publications, Inc., and Curtis Circulation Co., Subsidiary v. Commissioner of Internal Revenue

Hachette USA, Inc. and its subsidiary, Curtis Circulation Co. (collectively “Hachette”), appeal from the decision of the Tax Court (David Laro, Judge) entered October 30, 1995, upholding deficiency determinations totaling more than $ 3.3 million assessed against Hachette’s two predecessor corporations for the 1987 and 1988 tax years. Hachette contends that the regulation upon which the deficiency determination was based is invalid because it denies an exclusion from gross income that Hachette claims is required by statute.

The statute at issue, 26 U.S.C. § 458 (1994), allows magazine…