Shell Oil Co. v. Commissioner
United States Tax Court
Petitioner is an integrated oil company. Following the enactment of the Crude Oil Windfall Profit Tax Act of 1980, Pub. L. 96-223, 94 Stat. 229, petitioner changed its method of calculating "taxable income from the property" under sec. 613(a), I.R.C. 1954. Consequently, petitioner claimed a net income limitation benefit against its windfall profit tax liability pursuant to sec. 4988(b), I.R.C. 1954, totaling $ 241 million, which respondent disallowed in full.
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Petitioner is an integrated oil company. Following the enactment of the Crude Oil Windfall Profit Tax Act of 1980, Pub. L. 96-223, 94 Stat. 229, petitioner changed its method of calculating "taxable income from the property" under sec. 613(a), I.R.C. 1954. Consequently, petitioner claimed a net income limitation benefit against its windfall profit tax liability pursuant to sec. 4988(b), I.R.C. 1954, totaling $ 241 million, which respondent disallowed in full. Held, petitioner may treat net interest expense incurred in the acquisition of oil and gas properties through one of its wholly owned…
1Opinion of the Court
GOFFE, Judge:
The Commissioner determined deficiencies in petitioner’s windfall profit tax under section 49861 for the taxable quarters ended March 31, 1980, June 30, 1980, September 30, 1980, and December 31, 1980, as follows:
Taxable quarter ended— Deficiency
3/31/80 . $12,050,373
6/30/80 . 54,129,746
9/30/80 . 73,773,559
12/31/80 . 101,841,218
Alternatively, the Commissioner determined a deficiency in petitioner’s windfall profit tax under section 4986 for the entire taxable year ended December 31, 1980, in the amount of $241,810,176.17.
The issues in this case concern the attribution and…
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