Boeing Co. v. United States
Boeing filed suit against the United States seeking the refund of additional tax required by the Internal Revenue Service (IRS) for the years 1979 to 1987. In dispute was how Boeing should account for research and development costs in computing its net income from export sales of commercial airplanes under the export incentive provisions of the Internal Revenue Code (IRC). The district court held that Boeing was entitled to an income tax refund of approximately $419 million. The court of appeals reversed, holding that the IRS properly allocated Boeing’s research and development costs to its export sales when computing Boeing’s net income.
Questions Presented:
1. Whether, in computing their combined taxable income from the export sales of aircraft during the period from 1979-1984 under the provisions of the IRC pertaining to ”domestic international
sales corporations,” petitioners must take into account expenses incurred for aircraft research and development in the manner required by the then applicable Treasury regulations.
2. Whether, in computing their combined taxable income from the export sales of aircraft during the period from 1985-1987 under the provisions of the IRC pertaining to ”foreign sales
corporations,” petitioners must take into account expenses incurred for aircraft research and development in the manner required by the then-applicable Treasury regulations.
