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regulatory rules and guidelines to determine the amounts of
repair expenses deducted on tax returns. Relying on IBM v.
United States, 170 Ct. Cl. 357, 343 F.2d 914 (1965), petitioner
states that such disparate treatment “constitutes an abuse of
discretion as a matter of law.”5
In IBM, the taxpayer’s principal competitor had received a
private letter ruling that exempted certain of its equipment from
the business machines excise tax. IBM sought the same ruling and
filed a claim for refund. Two years later, having taken no
action on IBM’s request, the Commissioner decided to revoke the
ruling but only prospectively. At the same time, IBM’s claim for
refund was denied. Thus, for the period from the date that the
ruling was issued until the ruling was revoked, IBM was subject
to a tax to which a principal competitor was not. The Court of
Claims held, in this circumstance, that the Commissioner’s
failure to accord IBM the same treatment provided to its
competitor was an abuse of the discretion granted the
Commissioner by section 7805(b). Section 7805(b) allows the
Commissioner to prescribe the extent, if any, to which a ruling
5 Petitioner’s principal subsidiary made a similar claim in
Fla. Power & Light Co. v. United States, 56 Fed. Cl. 328 (2003),
alleging that its competitors had received rulings exempting them
from the highway use tax on vehicles identical or similar to its
own. The court rejected this claim.
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