- 39 -
2. Majority Opinion in Conflict With Case Law
The majority's reliance on the presence or absence of one or
more intangible intellectual property rights to control character
is in direct conflict with the case law. In Comshare, Inc. v.
United States, supra, the taxpayer received (by purchase) the
right to distribute the software. Despite the presence of this
intangible property right, the court went on to conclude that the
software was tangible. Thus, Norwest is in direct conflict with
Comshare. The application of the rationale in Norwest to this
case likewise brings this case in conflict with Comshare.
II. Conservative Approach
Rather than dispose of a hazy test which this Court adopted
in Ronnen v. Commissioner, 90 T.C. 74 (1988), for another one
which is just as hazy and not supported by any case law, I think
we should clarify the test in Ronnen and attempt to distinguish
Comshare, Inc. v. United States, supra. To do so would leave
intact our own precedent, as well as its progeny that relied upon
it.
A. Identify the Subject Property
The first step in applying the intrinsic value test is to
identify the subject property, or in other words, determine what
exactly the taxpayer has purchased or created. In Texas
Instruments, Inc. v. United States, 551 F.2d 599 (5th Cir. 1977),
the court found that seismic data did not exist without the tapes
upon which the data was stored, and accordingly that the data and
Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 NextLast modified: May 25, 2011