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nonproducers is a mere distinction without a difference and does
not merit a different result herein. Nor do we find dispositive
petitioner's reliance on the practice of the Federal Energy
Regulatory Commission (FERC), with respect to gas transmission
systems, on the one hand, and gas production and/or gathering
facilities on the other. We find no evidence that FERC's
practice on this subject has been adopted by either the Congress
or the Commissioner of Internal Revenue (the Commissioner) in
their promulgation of the laws, rules, and regulations which make
up our Federal income tax regime.
Petitioner argues that its gathering systems are included in
asset class 13.2 because the systems are used by petroleum and
natural gas producers to produce natural gas in that the systems
are essential to the production and sale of gas in the market.
We disagree with petitioner's conclusion. The mere fact that the
gathering systems may have helped producers produce and sell
their gas in the market does not mean that the systems are
exploration or production assets within the realm of asset class
13.2. Nor is it dispositive here that some producers own their
own gathering systems, which, in those cases, place the systems
within asset class 13.2. The critical fact is that petitioner's
gathering systems are not used by producers to produce gas. They
are used primarily by a pipeline company to carry gas to a
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Last modified: May 25, 2011