Green Forest Manufacturing Inc. - Page 10




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          petitioner reclassify each item of the Equipment in accordance              
          with MACRS, alternative depreciation system rules, as required              
          under section 168(g)(1)(A).  Such reclassification resulted in a            
          change in depreciation method and recovery period.  Even though             
          petitioner concedes that the reclassification is correct, it                
          argues that, under the rationale explicated in Brookshire Bros.             
          Holding, Inc. & Subs. v. Commissioner, supra, a reclassification            
          of property under MACRS is to be treated as synonymous with an              
          adjustment in useful life for purposes of a regulatory exception            
          contained in section 1.446-1(e)(2)(ii)(b), Income Tax Regs.                 
               Respondent argues that for purposes of section 1.446-                  
          1(e)(2)(ii), Income Tax Regs., as interpreted by the                        
          Commissioner, the term “useful life” is not synonymous with the             
          term “recovery period.”  Respondent cites Thomas Jefferson Univ.            
          v. Shalala, 512 U.S. 504 (1994), for the propositions that this             
          Court should “give substantial deference to an agency’s                     
          interpretation of its own regulations”, and “must defer to an               
          agency’s interpretation unless an alternative reading is                    
          compelled by the regulation’s plain language or by other                    
          indications of the agency’s intent at the time the regulation is            
          promulgated.”  The weight accorded to an agency’s interpretation            
          depends on the thoroughness of the agency’s consideration,                  
          validity of its reasoning, consistency with earlier and later               
          pronouncements, and other factors that give an interpretation the           






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