Standard Oil Co. v. Commissioner
United States Tax Court
On petitioner's consolidated Federal income tax returns for the taxable years 1967, 1968, and 1969, deductions were claimed for intangible drilling costs incurred in connection with the drilling of offshore wells with mobile rigs. The deductions were disallowed in the statutory notice of deficiency on the ground that the expenditures represented costs of exploratory operations and should be treated as capital costs of the properties concerned.
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On petitioner's consolidated Federal income tax returns for the taxable years 1967, 1968, and 1969, deductions were claimed for intangible drilling costs incurred in connection with the drilling of offshore wells with mobile rigs. The deductions were disallowed in the statutory notice of deficiency on the ground that the expenditures represented costs of exploratory operations and should be treated as capital costs of the properties concerned. It was further determined that the expenditures were not incurred in connection with the drilling of wells for the production of oil and gas. Held, the…
1Opinion of the Court
Goffe, Judge:
The Commissioner determined deficiencies in petitioner’s Federal income tax as follows:
Year Deficiency
1967. $10,065,739.20
1968. 8,533,941.34
1969. 30,532,036.79
Most of the numerous issues raised by the pleadings have been settled by the parties. Accordingly, the sole issue for decision is whether expenses incurred by three of petitioner’s subsidiaries in connection with the drilling of offshore wells with mobile rigs constitute intangible drilling and development costs within the meaning of section 263(c), I.R.C. 1954,1 and section 1.612-4, Income Tax Regs.
FINDINGS OF FACT
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2Cases cited12 opinions
- Commissioner v. BrownSupreme Court of the United States · 1965
- Commissioner v. MunterSupreme Court of the United States · 1947
- Louisiana Land & Exploration Co. v. CommissionerUnited States Tax Court · 1946
- Louisiana Land & Exp. Co. v. Commissioner of Int. Rev.Court of Appeals for the Fifth Circuit · 1947
- United States v. W. H. CockeCourt of Appeals for the Fifth Circuit · 1968
7 more not listed; retrieve them via the Exa API.
3Cited by19 opinions
- Seligman v. CommissionerUnited States Tax Court · 1985
- Standard Oil Co. v. CommissionerUnited States Tax Court · 1981
- Sun Co. & Subsidiaries v. CommissionerUnited States Tax Court · 1980
- Sun Company Inc. And Subsidiaries (Consolidated) v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1982
- Gates Rubber Co. & Subsidiaries v. CommissionerUnited States Tax Court · 1980
14 more not listed; retrieve them via the Exa API.