Granite Rock Co. v. United States

ORDER GRANTING DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT

/. INTRODUCTION

This action was filed by Plaintiffs as the result of the Internal Revenue Service’s (“IRS”) disallowance of Granite Rock Company’s 1995 tax deduction of approximately $20 million dollars for the cost of a new conveyor belt system. Both parties agreed that the case could be resolved by summary judgment and filed cross-motions for summary judgment. Plaintiffs argue that the deduction is proper based on the receding face doctrine, while the IRS argues that the deduction is not allowed based on such doctrine and that the costs of the new conveyor belt system must be charged to capital and recovered through depreciation or other similar deductions over a period of years.

The Court heard the parties’ cross-motions for summary judgment on January 27, 2003. Attorney Thomas Carlucci appeared on behalf of Plaintiffs and Assistant United States Attorney Thomas Moore appeared on behalf of Defendant. Based on all papers filed to date, as well as on the oral argument of counsel, the Court grants Defendant’s cross-motion for summary judgment and denies…