- 5 -
section 59(g) by excluding from AMTI tax preferences and
adjustments which they allege do not provide a tax benefit, in
order to increase the section 29 credits they can use against RIT
for each year in issue.
Section 29(b)(5) (renumbered 29(b)(6) for tax years
beginning after December 31, 1990) limits the section 29
nonconventional fuel source credit available in any year against
RIT to the excess of a taxpayer's RIT (reduced by credits
allowable under sections 27 and 28) over the TMT for that year.
The complicated interplay between section 29, the AMT, and
the tax benefit rule spawns the case before us. In order to
readily understand the arguments of the parties in this matter,
we must first examine the history and function of both the
minimum tax and the tax benefit rule.
A. The Minimum Tax
Since 1969, the Internal Revenue Code has included minimum
tax provisions for both corporate and individual taxpayers. Tax
Reform Act of 1969, Pub. L. 91-172, 83 Stat. 487. Congress
enacted the minimum tax to prevent corporate and individual
taxpayers from aggregating deductions to the point where they pay
either no tax or a "shockingly low" tax. First Chicago Corp. v.
Commissioner, 842 F.2d 180, 181 (7th Cir. 1988), affg. 88 T.C.
663 (1987). Deductions which might otherwise result in this
outcome are classified as "tax preference items."
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011