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"IRS Lands Another Victory in Fuel Mixture Credit Case"

January 27, 2021

Peter Lowy quoted in article on "IRS Lands Another Victory in Fuel Mixture Credit Case"

Tax Notes

In a recent Tax Notes article, Pete Lowy, co-chair of our SALT practice, discusses the shortcomings of plain meaning analysis in a recent Delek US Holdings Inc. v. Commissioner decision. In that decision, the U.S. District Court for the Middle District of Tennessee held that fuel mixture credits aren’t treated as payments of the excise tax liability, and therefore don’t reduce excise taxes included in the company’s cost of goods sold.

With the Delek court being “another passenger on the Sunoco bandwagon,” along with no contrary appellate court decision, “we should expect other courts will jump on, too,” Peter Lowy told Tax Notes. Lowy noted that the Delek court didn’t “reconcile how Congress could have intended the same tax credit to have more value under Section 6427 (which provides the credit as a nontaxable payment) than under Section 6426 (which provides the credit, according to the court, as a reduction to an otherwise deductible expense).”

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