Income Tax Issues
Tax Opinions / Full Tax Court Opinions / Income Tax Issues

TGS-NOPEC Geophysical Company v. Commissioner
155 T.C. No. 3

On August 26, 2020, the Tax Court issued its opinion in TGS-NOPEC Geophysical Company v. Commissioner (155 T.C. No. 3). The primary issue presented in TGS-NOPEC Geophysical Company v. Commissioner is whether the IRS’s disallowance of petitioner’s deduction for income attributable to domestic production activities pursuant to IRC § 199 was appropriate. Business Background in TGS-NOPEC Geophysical Company v. Commissioner The petitioner is engaged in the business of acquires, processes, and licenses marine seismic data. Raw seismic data is collected through seismic surveys, during which reflected energy waves are recorded on magnetic tapes. The data on those tapes is then processed to develop an image of subsurface geophysical structures. The processed data is ultimately purchased or licensed by companies in the oil and gas industry. The petitioner generated revenue by, among other activities, licensing the use of the processed seismic data to its clients in the oil and gas industry. Further,…

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August 26, 2020
Procedural Issues
Tax Opinions / Full Tax Court Opinions / Procedural Issues

Whistleblower 21276-13W v. Commissioner
155 T.C. No. 2

On August 26, 2020, the Tax Court issued its opinion in Whistleblower 21276-13W v. Commissioner (155 T.C. No. 2). The primary issue presented in Whistleblower 21276-13W v. Commissioner was whether the Tax Court had jurisdiction to hear and determine a whistleblower-related issue rather than remand it to the IRS Whistleblower Office when remand would have been futile because there was only one possible disposition, as a matter of law, and such matter was before the court. The Parties’ Positions in Whistleblower 21276-13W v. Commissioner in a Nutshell The petitioners/whistleblowers asked the Tax Court to compel the IRS to pay the amounts set forth in in previous decisions and stipulations, rather than smaller amounts diminished by “sequester reductions.” The IRS replied that it has paid in full the awards to which the whistleblowers are entitled: the amounts specified in the decisions less the sequester reductions to which the parties agreed. Jurisdiction to…

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August 26, 2020