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We agree with petitioner that use of broadly representative
data is an appropriate way to show whether the processing
allowance is likely to exceed nonrecoverable expenses. Two
factors lead us to that conclusion. First, both the processing
allowance and the amount of nonrecoverable expenses vary from
year to year and from taxpayer to taxpayer. Whether one is
likely to exceed the other is a factual question. Accord
Texasgulf, Inc. v. United States, 17 Cl. Ct. 275 (1989), modified
per order (Apr. 16, 1992). Whether the processing allowance is
likely to approximate or exceed nonrecoverable expenses can be
shown by actual OMT data. Second, we think it is appropriate to
consider industry data because a foreign tax either is or is not
an income tax, in its entirety, for all persons subject to it.
Sec. 1.901-2(a)(1) (flush language), Income Tax Regs.6 Whether a
tax is creditable for all persons subject to it can be shown by
multiyear data from a broadly representative group of taxpayers
subject to the tax.
2. Expert Testimony
Petitioner's expert was Robert B. Parsons (Parsons). He
prepared a report entitled “Study of Ontario Mining Tax Returns”
(Parsons OMT Report) and an “Overview of the Ontario Mining
6See Dolan, supra note 3.
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