Free Joint Status Report - District Court of Federal Claims - federal

Case 1:96-cv-00074-FMA

Document 108

Filed 08/25/2006

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS _______________ No. 96-74T (Judge Allegra) COLUMBIA/HCA HEALTHCARE CORPORATION, Plaintiff, v. THE UNITED STATES, Defendant. _______________ JOINT STATUS REPORT _______________ IN RESPONSE to this Court's Order dated March 8, 2006 requiring the parties to report on the status of settlement on or before April 7, 2006 and every 28 days thereafter, the parties present the following joint status report: 1. The only issue remaining in this case is the completion of the computations of

plaintiff's tax liability with respect to the 1991 taxable year at issue in this case. 2. On October 4, 2004, the Supreme Court denied HCA Inc.'s (the plaintiff's

successor) petition for writ of certiorari in Hospital Corporation of America v. Commissioner, 107 T.C. 116 (1996), aff'd, 348 F.3d 136 (6th Cir. 2003). On October 12, 2004, HCA proposed to the Internal Revenue Service ("IRS") Examination Division a streamlined computational methodology to compute the nonaccrual experience method exclusion for all taxable periods prior to and pending before this Court and the Tax Court. On February 8, 2005, HCA provided computations to the IRS Examination Division of the tax liability using this streamlined methodology for each of the 31 taxable periods affected, including its 1989-1991 taxable years. On May 2, 2005, the IRS requested detailed nonaccrual experience method computations. HCA

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provided the IRS with the requested nonaccrual experience method computations and revised tax computations for its 1989-1991 taxable years on November 4, 2005. 3. On May 16, 2006, the IRS Examination Division provided HCA with audit

procedures for finalizing tax computations for the 31 taxable periods. 4. On August 9, 2006, the IRS Examination Division and HCA reached agreement

regarding computation of the nonaccrual experience method exclusions for six of the 31 affected taxable periods, including the 1989-1991 taxable years. On August 15, 2006, HCA provided the IRS Examination Division with revised tax computations for these six taxable years. The IRS Examination Division provided HCA and IRS counsel with a draft audit report for these six taxable years on August 22, 2006. Upon completion of their review of the draft audit report, the IRS and HCA will prepare documentation to close the 1989 and 1990 taxable years. 5. After the 1989 and 1990 taxable years have been closed, the parties will begin the

process for documenting the resolution of tax computations for the 1991 taxable year. The parties will advise the Court regarding the expected timeframe for completing this process in subsequent status reports. 6. Pursuant to the Court's Order dated March 8, 2006, the parties will file a status

report 28 days subsequent hereto.

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7. Report.

Defendant's counsel has authorized plaintiff's counsel to file this as a Joint Status

Respectfully submitted,

/s/ Felix B. Laughlin Felix B. Laughlin DEWEY BALLANTINE LLP 1775 Pennsylvania Avenue, N.W. Washington, D.C. 20006 (202) 862-1040 (202) 862-1041 (fax) email: [email protected] Counsel for Plaintiff August 25, 2006

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