Anschutz Company and Subsidiaries - Page 34

                                       - 34 -                                         
          See secs. 1.263A-1(e)(3)(i), 1.451-1(d)(6)(ii), Income Tax Regs.            
          Next, we must define “reasonable allocation” for purposes of                
          sections 1.263A-1(e)(3)(i) and 1.451-1(d)(6)(ii), Income Tax                
          Regs., and then determine whether Qwest’s incremental cost                  
          allocation method satisfies that definition.                                
          II. Definition of “Reasonable Allocation” for Purposes of                   
               Sections 1.263A-1(e)(3)(i) and 1.451-1(d)(6)(ii), Income Tax           
               Regs.                                                                  
               Respondent argues that the language of section 1.263A-                 
          1(g)(3), Income Tax Regs., requires that the reasonableness                 
          standard of section 1.263A-1(f)(4), Income Tax Regs., governs the           
          first level allocations in the present case.  In the alternative,           
          respondent contends that the reasonableness standard of section             
          1.263A-1(f)(4), Income Tax Regs., should be incorporated into the           
          undefined phrase “reasonable allocation” in sections 1.263A-                
          1(e)(3)(i) and 1.451-3(d)(6)(ii), Income Tax Regs.  To support              
          this contention, respondent notes the parallel structure of the             
          regulations under sections 263A and 451 and cites legislative               
          history.  On the other hand, petitioners contend that because               
          “reasonable allocation” is not defined by sections 1.263A-                  
          1(e)(3)(i) and 1.451-3(d)(6)(ii), Income Tax Regs., “reasonable”            
          should be interpreted using its ordinary meaning.                           
               A.   The Language of Section 1.263A-1(g)(3),                           
                    Income Tax Regs.                                                  
               Respondent argues that the language of section 1.263A-                 
          1(g)(3), Income Tax Regs., requires that the reasonableness                 





Page:  Previous  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  43  Next

Last modified: May 25, 2011