- 20 -
the subject property was "necessary to carry out" petitioner’s
obligations under the franchise agreement.
E. Analysis
1. The Equipment To Be Installed by Petitioner in
the Livonia Cable Television System Is Described In
Sufficient Detail in the Pre-1986 Documents To
Permit a Determination of Whether the Equipment
Actually Installed Is "Readily Identifiable With"
Such Documents.
a. Relevant Case Law
We are not the first court called upon to interpret the term
“readily identifiable with”, as that term is used in section
204(a)(3). The meaning of that term has been addressed in three
cases by four different courts.8 In two of those cases, Bell
Atl. Corp. v. United States, 82 AFTR 2d 98-7375 at 98-7384, 99-1
USTC par. 50,119 at 87,041 (E.D. Pa. 1998), affd. __ F.3d __ (3d
Cir., Aug. 17, 2000), and United States v. Zeigler Coal Holding
Co., 934 F. Supp. 292, 295 (S.D. Ill. 1996), the courts reasoned
that, in order to be eligible for transition ITC under the
transition rule for supply or service contracts, "the property
must have been specifically described" in the contract or in a
related document. In both cases, the District Court relied upon
8 In a fourth case, Southern Multi-Media Communications, Inc. v.
Commissioner, 113 T.C. 412 (1999), discussed below, we recently
addressed the issue of whether improvements to a cable television
system were "necessary to carry out" the applicable franchise
agreements. We specifically refrained from deciding "whether
* * * [the improvements] were ‘readily identifiable with’ * * *
[the cable] franchise agreements." Id. at 422 n.3.
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011