Opinion
9179-19
08-03-2022
AMIT WADHWA & SONALI JOLLY, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Mark V. Holmes, Judge
This case was on the Court's October 25, 2021 trial calendar for San Francisco, California. The parties made good progress toward all issues but one -- petitioners' entitlement to a large section 179D credit. We moved the case onto a summary-judgment motion track, and briefing was complete in May. In working on the case, however, we noticed an issue that was not in those briefs. The IRC section that we must construe to rule on the motion includes the phrase, "[T]he 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 W. 17th St. LLC 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 September 1, 2022; and petitioners may file a memorandum of law responding to respondent's memorandum on or before September 15, 2022. It is also
ORDERED that the parties may by stipulation filed with the Court change these deadlines.