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plain meaning of Q&A-12 in the instant case is inconsistent with
this stated policy. Indeed, no clear, longstanding congressional
intent exists with respect to the issue presented in the instant
case.
Many tax provisions provide for favorable tax results, and
to conclude that a provision as applied is absurd simply because
the tax benefit is substantial is unwarranted. The results that
flow from the use of the PCR in the instant case, while quite
beneficial to petitioner, are not unreasonable or unsound and
certainly do not shock the general moral or common sense.
Respondent argues that applying the PCR to apportion less
than the full amount of the expenses known to be factually
related to the component possession product causes absurd
results. The Commissioner, however, chose to implement a
formulaic method; i.e., the PCR. Formulas by their very nature
are arbitrary, and their use is intended to minimize factual
disputes.
Respondent asks this Court, in effect, to rewrite the
regulations in order to avoid a result which Q&A-12 clearly
requires. Until Congress or the Secretary acts to modify the
result of Q&A-12, we will apply Q&A-12 as written.
We find that Exxon Corp. v. Commissioner, supra, is
distinguishable from the instant case and is therefore not
dispositive of the instant motion.
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