Pacific Enters. & Subsidiaries v. Commissioner
United States Tax Court
P was the parent company of several public utility gas companies, including S and S1. S and S1 owned pipelines and underground storage reservoirs. S and S1 maintained a static volume of gas in the pipelines and reservoirs that provided the pressure needed to deliver gas to customers. S and S1 accounted for these pressurizing gases ("cushion gas" in reservoirs and "line pack gas" in pipelines) as capital assets.
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P was the parent company of several public utility gas companies, including S and S1. S and S1 owned pipelines and underground storage reservoirs. S and S1 maintained a static volume of gas in the pipelines and reservoirs that provided the pressure needed to deliver gas to customers. S and S1 accounted for these pressurizing gases ("cushion gas" in reservoirs and "line pack gas" in pipelines) as capital assets. R determined that these gases should be accounted for as inventory. In 1985 and 1986, S reclassified a portion of its working gas to cushion gas, based on engineering reports that more…
1Opinion of the Court
Cohen, Judge:
Respondent determined the following deficiencies in, and additions to, petitioner’s Federal income taxes:
Year Deficiency Addition to tax sec. 6661
1977 -0-
1978 $6,695,614
1979 3,246
1980 6,949,217
1981 1,594,037
1982 -0-
1985 82,639,888 $5,354,116
Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.
After concessions, including respondent’s concession that the section 6661 addition to tax does not apply, the issues for decision are:(1) Whether the…
2Cases cited26 opinions
- Thor Power Tool Co. v. CommissionerSupreme Court of the United States · 1979
- Southern Pacific Transp. Co. v. CommissionerUnited States Tax Court · 1980
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- Wayne Bolt & Nut Co. v. CommissionerUnited States Tax Court · 1989
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