- 2 -
MEMORANDUM FINDINGS OF FACT AND OPINION
LARO, Judge: This consolidated case was submitted to the
Court without trial. See Rule 122(a). Lykes Energy, Inc.
(Lykes) and Subsidiaries petitioned the Court to redetermine the
following Federal income tax deficiencies:
Taxable Year Deficiency
1988 $1,075,219
1989 1,023,665
1990 1,306,399
1991 1,524,819
1992 1,704,765
1993 1,904,928
1994 1,953,607
We must decide whether funds collected by Lykes' subsidiary,
People's Gas System, Inc. (People's), under the terms of certain
energy conservation programs (FEECA programs) are includable in
People's gross income. We hold they are. We also must decide
whether People's expenditures under the FEECA programs are
required to be capitalized under section 263(a).1 We hold they
are to the extent described herein. Unless otherwise indicated,
section references are to the Internal Revenue Code in effect for
the subject years. Rule references are to the Tax Court Rules of
1 People's participated in seven FEECA programs. Respondent
has conceded that petitioners may deduct expenditures for two of
these programs; namely, the Residential Conservation Service
Program and the Appliance Energy Savings Payback Program. The
parties agree that any amounts required to be capitalized must be
amortized over 13 years.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011