- 11 -
1972-1 C.B. 721, the Commissioner changed this language to read
exactly as the first sentence of asset class 13.2 reads today.
See Rev. Proc. 77-10, 1977-1 C.B. 548. In making the latest
change, the Commissioner noted explicitly that the change was
"not intended to modify the composition of the existing classes
of Rev. Proc. 72-10." Sec. 1.04 of Rev. Proc. 77-10, supra at
548.
We conclude that the gathering systems are included in asset
class 46.0, and we so hold. In so holding, we have considered
the recent opinion of the U.S. District Court for the District of
Wyoming, which reaches a contrary holding in a setting that is
similar to the one at hand. See True v. United States, No.
96-CV-1050-J (D. Wyo. Nov. 3, 1997)(order granting motion for
partial summary judgment). Although we agree with the District
Court that the classification of assets for depreciation purposes
rests on each asset's primary use, we do not agree that pipeline
companies such as petitioner use gathering lines primarily to
produce petroleum. The District Court did not consider the
evolution of the language in asset class 13.2, which we find to
be most helpful to our inquiry. The court also did not consider
the industry definition of the word "production".
We have carefully considered all arguments made by
petitioner for a contrary holding and, to the extent not
discussed above, find them to be irrelevant or without merit.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011