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Petitioner disputes the above deficiencies and further
claims to have overpaid income taxes for 1979, 1981, and
1983 by at least $25,082,591, $6,881,055, and $14,137,211,
respectively.
After concessions, there are three issues for decision
in this case. Each issue is the subject of a separate
opinion. The issue that is the subject of this opinion
involves the deductions claimed on petitioner’s returns
for 1983, 1984, and 1986 for certain expenses incurred in
removing the overburden at a strip mine. Specifically,
the issue is whether petitioner is entitled to change the
income tax treatment of the subject overburden removal
expenses from the treatment applicable to development
expenditures, as reported on petitioner’s returns, to the
treatment applicable to production costs. This issue
turns on whether that change is foreclosed because it is
based upon a change of method of accounting as to which
petitioner had not first secured the consent of the
Secretary under section 446(e). Unless stated otherwise,
all section references are to the Internal Revenue Code
as in effect during the years in issue, and all Rule
references are to the Tax Court Rules of Practice and
Procedure. For purposes of this opinion, the tax years
in issue are 1983, 1984, and 1986.
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