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should be proscribed from modifying the overhead allocation
process used in their original WPT NIL calculations and instead
be required to retain the method originally employed, which
parallels their percentage depletion calculations and which was
accepted by respondent during the examination process. Cf. sec.
1.613-4(d)(2), Income Tax Regs. (generally, if a taxpayer has
consistently employed a reasonable method of determining the
costs of the various phases of the mining and nonmining process,
such method shall not be disturbed).
In response to phased decontrol of crude oil prices
announced by President Carter in April 1979, and increased
worldwide crude oil prices, Congress determined that the
additional revenues of "windfall" that U.S. oil producers would
thereby receive were an appropriate object of taxation. H. Rept.
96-304 at 7 (1979), 1980-3 C.B. 81, 91; S. Rept. 96-394 at 6
(1979), 1980-3 C.B. 131, 142. Consequently, Congress enacted the
Crude Oil Windfall Profit Tax Act of 1980 (Windfall Profit Tax
Act), Pub. L. 96-223, 94 Stat. 229, which from March 1, 1980,
until its repeal effective August 23, 1988, imposed an excise on
the "windfall profit" from certain crude oil produced in the
16(...continued)
address this issue given that we hold, based on respondent's
threshold argument, that petitioners cannot compute the NIL using
one allocation method for percentage depletion purposes, which
has the effect of increasing their deduction, and a different
method for WPT purposes, which has the effect of reducing their
WPT.
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