United Parcel Service of America, Inc. v. Commissioner
United States Court of Appeals for the Eleventh Circuit
254 F.3d 1014 (2001)
The United Parcel Service of America, Inc. (UPS) (plaintiff) reimbursed customers for lost or damaged packages up to $100 in value. UPS had an excess-value program in which UPS assumed liability for a parcel’s declared value over $100 if a customer paid 25 cents per additional $100 in declared value. UPS profited from this practice and claimed the excess-value charges as income on its 1983 tax return. However, UPS restructured the excess-value program for 1984. UPS’s new plan for the excess-value program was to reroute the payments through an overseas subsidiary, Overseas Partners, Ltd., through a series of insurance transactions. The commissioner of the Internal Revenue Service (IRS) (defendant) determined that UPS was deficient in 1984 for the amount of the excess-value charges. UPS petitioned the tax court for a redetermination, and the tax court upheld the commissioner’s determination. UPS appealed to the United States Court of Appeals for the Eleventh Circuit.
Rule of Law
Holding and Reasoning (Cox, J.)
Dissent (Ryskamp, J.)
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