Pacific First Federal Sav. Bank v. Commissioner
United States Tax Court
From 1971 through 1980, P deducted additions to its bad debt reserve. The amounts deducted were calculated with reference to P's taxable income for each year. In 1981 and 1982, P had net operating losses (NOLs). Held, subdivisions (vi) and (vii) of sec. 1.593-6A(b)(5), Income Tax Regs., are invalid to the extent they require that taxable income reflect any NOL carrybacks before the deduction for addition to bad debt reserve is calculated for certain financial institutions.
1Opinion of the Court
OPINION
WELLS, Judge:
Respondent determined the following deficiencies in petitioner’s Federal income tax:
Year Deficiency
1978 . $1,743,066
1979 . 5,057,885
1980 . 2,512,321
After concessions, the issue presented is whether certain portions of section 1.593-6A(b)(5)(vi) and (vii), Income Tax Regs., are valid. For certain financial institutions, including petitioner, the deduction for addition to bad debt reserve is generally equal to a percentage of the financial institution’s taxable income. The challenged portions of the regulation require that taxable income reflect any net operating loss…
2Cases cited16 opinions
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- National Muffler Dealers Assn., Inc. v. United StatesSupreme Court of the United States · 1979
- United States v. Southwestern Cable Co.Supreme Court of the United States · 1968
- Helvering v. R. J. Reynolds Tobacco Co.Supreme Court of the United States · 1939
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3Cited by25 opinions
- Peoples Federal Savings and Loan Association of Sidney v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1992
- The Ann Jackson Family Foundation v. Commissioner Internal Revenue ServiceCourt of Appeals for the Ninth Circuit · 1994
- Central Pa. Sav. Ass'n v. CommissionerUnited States Tax Court · 1995
- Pacific First Federal Savings Bank v. Commissioner Internal Revenue ServiceCourt of Appeals for the First Circuit · 1992
- Bell Federal Savings and Loan Association v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1994
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