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petitioner. Petitioner filed consolidated returns with Florida
Power during the years in issue.
On December 28, 1995, respondent issued a notice of
deficiency for the taxable years 1988 through 1992. In its First
Amended Petition, filed May 13, 1996, petitioner argued for the
first time that respondent erred in failing to allow a deduction
for certain repair expenses related to Florida Power when
determining the deficiency amounts in the notice of deficiency.
Petitioner claimed that it had improperly characterized the
following expenditures related to Florida Power as capital
expenditures and that it should have deducted them as repair
expenses:
Year Amount
1988 $35,324,412
1989 52,115,791
1990 54,746,820
1991 56,823,897
1992 11,914,614
Total 210,925,534
Petitioner did not file a Form 3115, Application for Change in
Accounting Method, with respondent to request a change in
accounting method for the expenditures at issue. Respondent did
not raise the change in accounting method issue prior to the
filing of his motion for partial summary judgment.
Florida Power owns and operates fossil and nuclear electric
generating plants in Florida and also owns interests in coal-
fired electric generating plants in Georgia and Florida, which
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