Robbins Tire & Rubber Co. v. Commissioner
United States Tax Court
Petitioner, an accrual basis taxpayer, and respondent entered into an agreement settling prior tax liabilities. During its taxable year ending Sept. 30, 1964, petitioner made certain payments pursuant to the terms of the settlement, in an amount less than the total of the compromised taxes and penalties.
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Petitioner, an accrual basis taxpayer, and respondent entered into an agreement settling prior tax liabilities. During its taxable year ending Sept. 30, 1964, petitioner made certain payments pursuant to the terms of the settlement, in an amount less than the total of the compromised taxes and penalties. Held: In accordance with Rev. Rul. 58-239, 1958-1 C.B. 94, the payments are to be applied against the taxes, penalties, and interest, in that order, due for the earliest year, then to taxes, penalties, and interest, in that order, due for each succeeding year, until the payments are absorbed.…
1Opinion of the Court
OPINION
In 1964 petitioner and respondent entered into a comprehensive agreement to settle certain of petitioner’s liabilities for taxes, penalties, and interest for prior years. During the taxable year 1964 petitioner made payments pursuant to two offers in compromise and a collateral agreement, in a sum less than the aggregate amount of the compromised taxes and penalties. The issue is whether, as a result of the settlement, petitioner is entitled to any deduction under section 163(a)11 for the taxable year 1964 for interest paid or accrued.
Petitioner contends that each, payment constituted…
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