Trinity Industries, Inc. v. United States, No. 12-11012 (5th Cir. 2014)Annotate this Case
Trinity, a designer and builder of vessels, appealed the district court's holding that the tax due Trinity was $135,787.60 for 1994 and $0 for 1995. The court vacated the district court's holding as to the consistency rule and remanded for findings as to whether, in light of the district court's Phase I order, the four base period vessels at issue were sufficiently experimental to constitute qualified research. The court concluded that the district court correctly held that the report's conclusion, though admissible evidence, was neither binding nor entitled to a presumption of correctness. Therefore, while the I.R.S.'s ultimate determination of Trinity's tax liability was presumptively correct, the revenue agent report's subsidiary conclusion that the Penn Tugs met the process-of-experimentation test was neither binding on the Government nor presumptively correct. Further, the district court did not err in its analysis of the Penn Tugs. Accordingly, the court affirmed in part, reversed in part, and remanded.