The opinion of the court was delivered by: STIEHL
Before the Court is plaintiff's motion for summary judgment.
On March 8, 1993, defendant submitted amended tax returns claiming refunds of federal income taxes paid for several years, including 1986 and 1987. Defendant's claims for refund were based on claimed entitlement to investment tax credits (hereinafter "ITC"), on the acquisition of personal property with a cost basis of $ 1,862,351 for 1986, and $ 4,131,162 for 1987. Based on those returns, on April 27, 1993, defendant was sent refunds of tax and interest for the years 1986 and 1987 in the amount of $ 110,293.61 and $ 36,388.97 respectively.
On January 30, 1995, during the course of an income tax examination, the IRS made an information document request of defendant to provide documentation of its claims for investment tax credit for years including 1986 and 1987. On March 8, 1995, defendant responded to the IRS's information document request by letter, and included copies of six coal supply contracts between defendant and its customers. Defendant also provided the IRS with a copy of its Long Range Plans for the years 1985 through 1989, including a capital expenditures summary. From all of the information available to it, the IRS compiled exhibits setting forth the description and cost basis of most of the specific items of personal property upon which defendant claimed ITC in 1986 and 1987. The IRS was unable to identify such personal property having a cost basis totalling $ 80,505 for 1986, and $ 21,106 for 1987, upon which the claims for refund were based.
SUMMARY JUDGMENT STANDARDS
Fed. R. Civ. P. 56(c) provides that a district court shall grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In determining whether a district court properly granted summary judgment, "all factual inferences are to be taken against the moving party and in favor of the opposing party." International Adm'rs, Inc. v. Life Ins. Co. of N. Am., 753 F.2d 1373, 1378 (7th Cir. 1985). In instances in which "inferences contrary to those drawn by the trial court might be permissible," a district court's grant of summary judgment must be reversed. Munson v. Friske, 754 F.2d 683, 690 (7th Cir. 1985). Once a motion for summary judgment has been made and properly supported, however, the nonmovant does have the burden of setting forth specific facts showing the existence of a genuine issue of a material fact for trial. See Rule 56(e); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, 464 U.S. 960, 78 L. Ed. 2d 336, 104 S. Ct. 392 (1983), (noting that "a bare contention that an issue of fact exists is insufficient to raise a factual issue"). Although a requisite, the existence of a factual dispute is not, standing alone, sufficient to bar summary judgment. It is well settled that a "factual dispute does not preclude summary judgment unless . . . the disputed fact is outcome determinative under the governing law." Egger v. Phillips, 710 F.2d 292, 296 (7th Cir.), cert. denied, 464 U.S. 918, 78 L. Ed. 2d 262, 104 S. Ct. 284 (1983), cited in Shlay v. Montgomery, 802 F.2d 918, 920 (7th Cir. 1986). In addition, the parties agree that in a suit over erroneous refunds of federal income taxes, the United States bears the burden of proof. United States v. Commercial Bank of Peoria, 874 F.2d 1165, 1169 (7th Cir. 1989).
Under § 49(a) of the Internal Revenue Code (Code), as amended by § 211(a) of the Tax Reform Act of 1986 (Act), the regular investment tax credit no longer applied to property placed in service after December 31, 1985. Section 49(b)(1) provides, however, that the repeal of the ITC in § 49(a) does not apply to "transition property" as defined in § 49(e), and thus transition property is still eligible for ITC.
Section 49(e)(1) of the Code defines the term "transition property" as:
Any property placed in service after December 31, 1985, and to which the amendments made by section 201 of the Tax Reform Act of 1986 do not apply, except that in making such determination--
(B) section ... 204(a)(3) of such Act shall be applied by substituting "December 31, 1985" for ...