DESCRIPTION FORECASTS CASES DATA MANUSCRIPTS   CONTRIBUTORS

Boeing Co. v. United States December 9, 2002 (01-1209) return to case listing Case Summary Courts have previously determined that Petitioner is entitled to an income tax refund of approximately $419 million for the years of 1979 to 1987. The present issue is how to account for research and development costs in computing Petitioner's net income from export sales of commercial airplanes. The IRS denied portions of Petitioner's claims for a refund because it determined that Petitioner's method of allocating its research and development costs violated Treas. Reg. § 1.861-8(e)(3). This regulation requires all research and development costs to be allocated to and apportioned among all sales within the broad product categories explicated in the Office of Management and Budget's Standard Industrial Classification. Petitioner filed suit, and the district court found in favor of Petitioner. The U.S. Court of Appeals for the Ninth Circuit reversed and found that the Commissioner of Internal Revenue had properly computed Petitioner's net income using Treas. Reg. § 1.861-8(e)(3) to allocate the research and development costs to its export sales. The opinion of the Ninth Circuit is found at 258 F.3d 958. To see the opinion of the lower court, click here. PREDICTED OUTCOME ACTUAL OUTCOME Forecasting Model Expert One Expert Two Expert Three 8-1 to Reverse 8-1 to Affirm 7-2 to Affirm n/a 7-2 to Affirm VOTING TO REVERSE Rehnquist O'Connor Scalia Kennedy Souter Thomas Ginsburg Breyer Stevens Rehnquist Thomas Thomas Scalia VOTING TO AFFIRM Stevens Rehnquist O'Connor Scalia Kennedy Souter Thomas Ginsburg Breyer Stevens O'Connor Scalia Kennedy Souter Ginsburg Breyer Rehnquist Stevens O'Connor Kennedy Souter Ginsburg Breyer return to case listing