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Supreme Court holds for service in Goodyear case.

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SUPREME COURT HOLDS FOR SERVICE IN GOODYEAR CASE

In a unanimous decision in December 1989, the U.S. Supreme Court decided the case of Goodyear Tire & Rubber Co. et al. in favor of the IRS. At issue was whether U.S. or foreign legal concepts prevailed in a determination of "accumulated profits" for purposes of the section 902 foreign tax credit.

Originally, the U.S. Court of Claims had held for the IRS but, on appeal, the Federal Circuit Court found for the taxpayer. As a result, the IRS reportedly received refund claims for approximately $900 million. The Supreme Court then granted the IRS's petition for certiorari and agreed with the IRS that U.S. law was controlling. (See JofA, Apr.89, page 112, and July89, page 123.)

Observation: The result in Goodyear was expected. However, the IRS was allegedly prepared to ask Congress for legislative change if the Supreme Court had upheld the federal circuit.
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Author:Willens, Robert
Publication:Journal of Accountancy
Date:Feb 1, 1990
Words:157
Previous Article:S corporation acquisitions.
Next Article:1989 tax act.
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