Anschutz Company and Subsidiaries - Page 11

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               Section 1.263A-1(e)(3)(i), Income Tax Regs., does not                  
          provide for a “directly benefits” test or an “incurred by reason            
          of” test, of the kind suggested by respondent.  Instead, as found           
          in Anschutz I and as indicated by the above-emphasized language,            
          sections 1.263A-1(e)(3)(i) and 1.451-3(d)(6)(ii), Income Tax                
          Regs., provide a “reasonable allocation” test for a taxpayer’s              
          allocation of indirect costs among taxpayer-produced property,              
          long-term contracts, and other activities.  The “reasonable                 
          allocation” test was the focus of the Court’s analysis in                   
          Anschutz I.  Using the appropriate test, we found that Qwest’s              
          incremental cost allocation method was a reasonable cost                    
          allocation method under sections 1.263A-1(e)(3)(i) and 1.451-               
          3(d)(6)(ii), Income Tax Regs.  For these reasons, respondent’s              
          allegation that the Court improperly focused on the “incurred by            
          reason of” test while ignoring the “directly benefits” test is              
          without support.                                                            
               Respondent has failed to demonstrate unusual circumstances             
          or substantial errors of fact or law.  Respondent seeks only to             
          assert a new legal theory, which we find unpersuasive.                      
          Accordingly, we will deny respondent’s motion for                           
               We have considered all arguments and contentions made, and,            
          to the extent not mentioned, we conclude that they are moot,                
          irrelevant, or without merit.                                               

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Last modified: May 25, 2011