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Petitioner’s argument that the corporation should be allowed
to use its individual experience because respondent failed to
issue regulations or guidance as to the national weighted average
preproduction period for citrus trees is without merit. The
plain language of section 263A requires that for a citrus farmer
such as petitioner, the preproductive period in the section
263A(d)(1)(A)(ii) exception from section 263A capitalization is
measured by means of the nationwide weighted average
preproductive period for citrus trees. As indicated above,
neither party was able to show that average.
Petitioner also argues that the use of a nationwide average
preproduction period for each type of plant is a vague standard
or concept and that the statutory standard is vague and should be
invalidated. Respondent counters that although no guidance was
published by the Secretary or respondent, the standard is not
vague. Respondent also explained that the reason that Congress
used a nationwide weighted average preproductive period for each
type of plant was to ensure that one region of the country did
not have an economic advantage over another region because of
more favorable growing conditions. So, e.g., if southern farmers
enjoy a longer growing season, they may be able to meet the 2-
year test and currently deduct their cost of production, whereas
northern farmers would not be able to take the current deductions
and would be required to capitalize the same expenses or costs.
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