Clajon Gas Co., L.P. v. Comm'r
United States Tax Court
Partnership C owned and operated natural gas gathering systems to transport gas purchased from natural gas producers. C treated certain pipeline and related components of the gathering systems as natural gas production assets within asset class 13.2 of Rev. Proc. 87-56, 1987-2 C.B. 674, with a 7-year recovery period.
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Partnership C owned and operated natural gas gathering systems to transport gas purchased from natural gas producers. C treated certain pipeline and related components of the gathering systems as natural gas production assets within asset class 13.2 of Rev. Proc. 87-56, 1987-2 C.B. 674, with a 7-year recovery period. Held: Because C's use of its gathering systems determines the proper asset class, and because C was not a "natural gas producer", the components in question are not within asset class 13.2; rather, they are used by C to transport gas and are, therefore, within asset class 46.0,…
1DissentWells, C.J.
I respectfully dissent. In the
instant case, the majority opinion states that it will follow our opinion in Duke Energy Natural Gas Corp. v. Commissioner, 109 T.C. 416 (1997), which was reversed by the U.S. Court of Appeals for the Tenth Circuit, 172 F.3d 1255 (10th Cir. 1999). In rejecting the plain language analysis of Rev. Proc. 87-56, 1987-2 C.B. 674, by the Court of Appeals, however, the majority opinion in the instant case does not rely on this Court’s rationale in Duke Energy Natural Gas Corp. Rather, the majority injects yet another rationale, based upon its reading of the regulations,…
2Cases cited7 opinions
- Rauenhorst v. Comm'rUnited States Tax Court · 2002
- Kenneth L. Phillips v. Commissioner of Internal RevenueCourt of Appeals for the D.C. Circuit · 1988
- Coastal Petroleum Refiners, Inc. v. CommissionerUnited States Tax Court · 1990
- Phillips v. CommissionerUnited States Tax Court · 1987
- Duke Energy Natural Gas Corp. v. CommissionerCourt of Appeals for the Tenth Circuit · 1999
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