Opinion
12466-16
03-13-2023
THE CANNON CORPORATION AND SUBSIDIARIES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Mark V. Holmes, Judge
This case was on the June 12, 2018 trial calendar for Buffalo, New York. It arises from a claimed section 179D credit. There are pending motions, but in working on the case we noticed an issue that was not in the briefs. The Code section that we must construe to rule on the motion includes the phrase "the Secretary shall promulgate a regulation to allow the allocation of the deduction to the person primarily responsible for designing the property . . ."
As both parties recognize, the Secretary has never issued a regulation allowing the allocation at issue in this case. This raises an issue of whether the Court -- or perhaps respondent in some way other than a regulation -- has itself the power to allocate the deduction in the absence of a regulation. The parties may wish to consult Amandeep S. Grewal, "Substance Over Form? Phantom Regulations and the Internal Revenue Code," 7 Hous. Bus. & Tax L.J. 42, 45-46 (2006), as well as authorities compiled in 15 West 17th St. v. Commissioner, 147 T.C. 557 (2016).
It is possible that this is a dispositive issue, so it is
ORDERED that respondent may file a memorandum of law addressing this issue on or before April 14, 2023; and petitioner may file a memorandum of law responding to respondent's memorandum on or before May 15, 2023. It is also
ORDERED that the parties may by stipulation filed with the Court change these deadlines.