Borchers v. C.I.R., No. 90-2724

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Writing for the Court: Before FAGG, Circuit Judge, and HENLEY, Senior Circuit Judge, and MAGILL; FAGG
• Citation: 943 F.2d 22
• Parties: -5439, 91-2 USTC P 50,416 Richard J. BORCHERS; Jane E. Borchers, Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Appellee.
• Docket Number: No. 90-2724
• Decision Date: 23 August 1991

Page 22

943 F.2d 22 68 A.F.T.R.2d 91-5439, 91-2 USTC P 50,416 Richard J. BORCHERS; Jane E. Borchers, Appellants,
v.
COMMISSIONER OF INTERNAL REVENUE, Appellee. No. 90-2724. United States Court of Appeals,
Eighth Circuit. Submitted May 14, 1991.
Decided Aug. 23, 1991.

Bernie H. Beaver, Minneapolis, Minn., for appellants.

David A. Hubbert, argued, Washington, D.C. (Gary R. Allen and Richard Farber, on the brief), for appellee.

Before FAGG, Circuit Judge, and HENLEY, Senior Circuit Judge, and MAGILL, Circuit Judge.

Page 23

FAGG, Circuit Judge.

Richard J. Borchers and Jane E. Borchers appeal the tax court's decision denying them an investment tax credit on computer equipment Richard leased to the Borcherses' wholly-owned corporation, Decision Systems, Inc., in 1982. See 26 U.S.C. § 46(e)(3)(B) (1982) (amended 1988). We affirm.

This is the second time we have had this case before us. Initially the tax court held the Borcherses were entitled to an investment tax credit, Borchers v. Commissioner, 55 T.C.M. (CCH) 1469 (1988), and the Commissioner appealed. We could not effectively review the decision because the tax court's failure to offer an analysis "[made] it impossible for us to determine the correctness of [its] decision." Borchers v. Commissioner, 889 F.2d 790, 791 (8th Cir.1989). Thus, we vacated the tax court's decision and remanded the case for further proceedings. Id. On remand the tax court engaged in a reasoned analysis changing the result and disallowing the credit. Borchers v. Commissioner, 95 T.C. 82 (1990). The Borcherses now appeal.

The Borcherses argue that after we vacated and remanded the tax court's first decision, the tax court could only explain, not change, the initial result. We disagree. Although our mandate controls all matters within its scope, a court on remand is free to revisit any issue we did not expressly or impliedly decide. Newball v. Offshore Logistics Int'l, 803 F.2d 821, 826 (5th Cir.1986); see also Bethea v. Levi Strauss & Co., 916 F.2d 453, 456 (8th Cir.1990). In our earlier decision, we did not decide whether the Borcherses were entitled to an investment tax credit or confine the tax court to explaining its first decision. Accordingly, the tax court was free to change the result on remand.

We now turn to the merits of the case. A noncorporate lessor of property seeking an investment tax credit under 26 U.S.C. § 46(e)(3)(B) must show the property is leased for less than 50% of its useful life. Here,...