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6512(b)1, claiming overpayments of WPT for the taxable periods of
1983, 1984, and 1985, respectively, in the following amounts:
$6,107,901, $5,969,611, and $7,931,434, resulting from a
recomputation of the WPT net income limitation (NIL), or WPT NIL.
After concessions by the parties2, the issues for decision
are: (1) Whether petitioner, Energy, should be equitably
estopped to deny that the limitations period for the taxable
periods of 1985 were extended properly under section 6501(c)(4).
We hold it should. (2) Whether, pursuant to section 613A(d)(2),
Union Texas Petroleum Corporation (Old Petroleum) and Union Texas
Petroleum Corporation (New Petroleum), f.k.a. Union Texas
Properties Corporation (Properties) were independent producers
during the taxable years in issue. We hold they were.
(3) Whether petitioners are entitled to recompute Old Petroleum's
and New Petroleum's WPT NIL computations for the taxable periods
of 1983, 1984, and 1985, where the recomputations do not follow
1 All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
2 Subject to the issues discussed herein, including the
overpayment issue, petitioners conceded the remaining issues
raised in the notices of deficiency and petitions. Respondent
conceded that petitioners are entitled to exclude from gross
income a ratable portion of the lease bonus payments made with
respect to producing properties for purposes of computing the WPT
NIL and that petitioners are entitled to capitalize lease bonus
payments in determining "as if" cost depletion.
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