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Lawyers for Harkins Theatres Inc. are finding a U.S. Tax Court judge's ruling on Pepsi-Cola rebates hard to swallow.
The company's corporate tax attorney and the tax attorney for the firm's owner expressed disappointment over the ruling that makes Dan Harkins and his wife Karen liable for taxes a year earlier than anticipated.
The setback came when Tax Court Judge Juan F. Vasquez upheld an Internal Revenue Service ruling the Arizona movietheatre mogul had to pay taxes in 1996 on Pepsi marketing rebates that weren't paid until 1997 for the purchase of Pepsibrand products.
"We were disappointed in the decision, of course," said David N. Sarren, corporate attorney for the company. "It's really a timing issue. It's a matter of what year you report the income....