MidAmerican Energy Co. v. Commissioner
United States Tax Court
P is a public utility engaged in the retail distribution of natural gas, electricity, and related services. In 1987, in response to the enactment of sec. 451(f), I.R.C., P modified its method of accounting for tax purposes to coincide with its financial and regulatory accounting method and made a sec. 481 adjustment. Federal income tax rates were reduced in 1986 pursuant to the Tax Reform Act of 1986, Pub.
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P is a public utility engaged in the retail distribution of natural gas, electricity, and related services. In 1987, in response to the enactment of sec. 451(f), I.R.C., P modified its method of accounting for tax purposes to coincide with its financial and regulatory accounting method and made a sec. 481 adjustment. Federal income tax rates were reduced in 1986 pursuant to the Tax Reform Act of 1986, Pub. L. 99-514, sec. 821, 100 Stat. 2372, creating an excess in deferred Federal income tax. P was required to adjust utility rates from 1987 through 1990 to compensate for this overcollection.…
1Opinion of the Court
Cohen, Judge:
Respondent determined the following deficiencies in the Federal income tax of MidAmerican Energy Co. (petitioner):
TYE Deficiency
Dec. 31, 1984 $698,682
Dec. 31, 1987 171,396
Dec. 31, 1988 994.913
Dec. 31, 1989 1,457,191
Dec. 31, 1989 715,208
Nov. 7, 1990 391.914
Dec. 31, 1990 5,121,384
On November 7, 1990, a merger took place, resulting in a short tax year.
After concessions by the parties, the issues for decision in these consolidated cases are whether petitioner’s accrual of income from furnishing utility services was in accordance with section 451(f), whether the amount reported by…
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