Sierracin Wins 2 of 3 Issues in Tax Court

Sierracin said it received a largely favorable ruling from the U.S. Tax Court in a case in which it could have been liable for up to $4 million in interest on taxes the company previously deferred.

The Sylmar aerospace contractor had maintained it could use an accounting method that allows it to postpone recognizing profits and losses for tax purposes at two of its divisions for contracts they are working on until those contracts are finished.

The tax court found that the divisions met the criteria for using such methods, which is that they must make unique products with unpredictable costs.

Those two divisions--Sylmar and TransTech--make windshields for aircraft made from a combination of glass and plastic. The tax court said a third division--Magnedyne, which makes aircraft motors--could not use the method.

Sierracin said that the ruling will have no financial impact on the company and that it had provided reserves for the interest charges.