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Discussion
Reconsideration under Rule 161 is intended to correct
substantial errors of fact or law and allow the introduction of
newly discovered evidence that the moving party could not have
introduced, by the exercise of due diligence, in the prior
proceeding. Estate of Quick v. Commissioner, 110 T.C. 440, 441
(1998). This Court has discretion whether to grant a motion for
reconsideration and will not do so unless the moving party shows
unusual circumstances or substantial error. Id.; see also Vaughn
v. Commissioner, 87 T.C. 164, 166-167 (1986). “Reconsideration
is not the appropriate forum for rehashing previously rejected
legal arguments or tendering new legal theories to reach the end
result desired by the moving party.” Estate of Quick v.
Commissioner, supra at 441-442.
In his motion for reconsideration, respondent alleges that
“the Court failed to analyze the application of the ‘directly
benefits’ test, as required by the section 263A regulations.”
Respondent further argues:
Section 1.263A-1(e)(3)(i) implements the section 263A
requirement that a taxpayer must allocate the costs of
producing an asset to that asset. Section 1.263A-
1(e)(3)(i) of the regulations provides: “Indirect
costs are properly allocable to property produced or
property acquired for resale when the costs directly
benefit or are incurred by reason of the performance of
production or resale activities.” (Emphasis added.)
The test in section 1.263A-1(e)(3)(i) is disjunctive:
Qwest must allocate Common Indirect Costs to its
section 263A retained assets if those costs meet either
prong of the test. The Court’s opinion is based on the
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Last modified: May 25, 2011