RESPONDENT:Commissioner of Internal Revenue
LOCATION:Circuit Court of Vermilion County
DOCKET NO.: 90-1278
DECIDED BY: Rehnquist Court (1991-1993)
LOWER COURT: United States Court of Appeals for the Third Circuit
CITATION: 503 US 79 (1992)
ARGUED: Nov 12, 1991
DECIDED: Feb 26, 1992
Kent L. Jones – for respondent
Richard J. Hiegel – on behalf of the Petitioner
Media for INDOPCO, Inc. v. Commissioner of Internal Revenue
Audio Transcription for Opinion Announcement – February 26, 1992 in INDOPCO, Inc. v. Commissioner of Internal Revenue
William H. Rehnquist:
The opinion of the Court in No. 90-1278, Indopco versus Commissioner of Internal Revenue will be announced by Justice Blackmun.
Harry A. Blackmun:
This is a federal income tax case coming to us from the Third Circuit.
The issue is the deductibility under Section 162(a) of the Internal Revenue Code of professional fees and expenses the taxpayer incurred in connection with a friendly takeover.
The Commissioner disallowed the claim deductions.
The United States Tax Court ruled that the expenditures were capital in nature and were not what was called ordinary and necessary business expenses within the meaning of the statute.
The Third Circuit affirmed.
In an opinion filed with the Clerk today, we also affirm and we hold that the creation of a separate and distinct asset in the transaction of this kind is not a prerequisite for capitalization.
The taxpayer has the burden of showing a right to the deduction and in our view, has not carried that burden here.
And this too is a unanimous decision.