Court Opinion

ID: 4474234
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:10:50.619842+00
Date Added: 2024-06-11T15:04:31.971410
License: Public Domain

Wells, C.J., dissenting. 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, to decide that petitioner must depreciate its gathering system using a 15-year recovery period instead of a 7-year recovery period. While I agree with Judge Foie/ dissent, I have an additional point I would like to raise. Revenue procedures are published to guide taxpayers, who are permitted to rely on them. We should not read an ownership requirement into Rev. Proc. 87-56, supra, where its plain language does not require it. In section 167(m), Congress delegated respondent broad powers to promulgate regulations to determine the class lives of property used in the natural gas industry. Respondent promulgated regulations pursuant to that authority and indicated that the class guidelines would be published pursuant to that authority. Rev. Proc. 87-56, supra, reflects respondent’s class-life determinations. Rather than providing guidance to taxpayers, Rev. Proc. 87-56, supra, has produced considerable confusion and uncertainty. In Duke Energy Natural Gas Corp. v. Commissioner, supra, this Court and the Court of Appeals for the Tenth Circuit, considered the question before the Court today, and arrived at contrary results. The majority opinion now offers another rationale for its result. Rev. Proc. 87-56, supra, requires only that assets be “used” by natural gas producers to qualify under section 13.2. In the instant litigation, respondent asserts that assets must be both “used” and “owned” by natural gas producers. Revenue procedures are promulgated to provide clear and precise guidance to taxpayers, and I would hold respondent to the plain language of that published guidance.1 To require taxpayers to consult a team of tax attorneys to decipher that guidance frustrates the very purpose for which it was issued. Swift, Beghe, Foley, Vasquez, and Marvel, JJ., agree with this dissenting opinion.   1 note that we have held that the Commissioner may not choose to litigate against an official position the Commissioner has published without first revising or revoking that position. Rauenhorst v. Commissioner, 119 T.C. 157 (2002); Coastal Petroleum Refiners, Inc. v. Commissioner, 94 T.C. 685 (1990); see Phillips v. Commissioner, 88 T.C. 529 (1987), affd. in part and revd. in part 851 F.2d 1492 (D.C. Cir. 1988); see also Slechter v. Commissioner, T.C. Memo. 1987-528.