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internal inconsistencies, as was involved in Standard Oil
Co. (Indiana) v. Commissioner, supra. Respondent
distinguishes Standard Oil Co. (Indiana) on the ground
that in this case “petitioner treated all of Cordero’s
overburden removal costs as mine development expenses
deductible under I.R.C. � 616(a) for purposes of applying
the provisions of � 291(b)”, not just the amount
capitalized. In effect, respondent argues that the
overburden removal costs in this case were not treated
inconsistently. As an example, respondent notes that for
the first part of 1983, Cordero calculated overburden
removal costs of $13,743,557 and capitalized and amortized
15 percent of that amount, or $2,061,534, as required by
section 291(b). Respondent notes: “If petitioner had
treated any portion of Cordero’s overburden costs as
production costs, then the applicable percentage rate
specified in section 291 would not have been applied
against that portion, and a smaller amount of overburden
removal costs would have been capitalized and amortized
each year.”
Application of Section 446 to a Member of an Affiliated
Group of Corporations
In the case of an affiliated group of corporations,
such as petitioner and the members of its affiliated group,
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