appears that these expenses were attributable to an agreement that the taxpayer had with E.F. Hutton to provide advice and services on the takeover. See id. at 652. The taxpayer had argued that these expenses were currently deductible because the takeover was a hostile one from which it received no long-term benefit. We found that the takeover was not hostile and that it generated long-term benefits. Most recently, in A.E. Staley Manufacturing Co. & Subs. v. Commissioner, 105 T.C. 166 (1995), revd. and remanded 119 F.3d 482 (7th Cir. 1997), we held that INDOPCO prevented the taxpayer from currently deducting expenses for investment banker's fees and printing costs incurred incident to a takeover. The taxpayer had argued that these expenses were currently deductible because the takeover was hostile. We held that the expenses had to be capitalized because they were incurred incident to the taxpayer's change of ownership from which it derived significant long-term benefits. Upon appeal, the Court of Appeals for the Seventh Circuit disagreed in part. The Court of Appeals held that the expenses were deductible to the extent that they were not incurred to facilitate the transaction at issue there. The cases of INDOPCO, Victory Markets, and A.E. Staley all addressed the capitalization of expenses which were incurred as direct costs of effecting a corporate acquisition. In the instant case, by contrast, DBTC incurred the disputed costs before and incidentally with its acquisition. Petitioner focuses on the timing of the disputed costs and invites the Court to allow deductibility of these costs because they were incurred in investigating the expansion of its existing business, before the time that DBTC's management had formally decided to enter into the transaction by approving the agreement. We decline this invitation. The disputed expenses are mostly preparatory expenses that enabled DBTC to achieve the long-term benefit that it desired from the transaction, and the fact that the costs were incurred before DBTC's management formally decided to enter into the transaction does not change the fact that all these costs were sufficiently related to the transaction. In accordance with INDOPCO, the costs must be capitalized because they are connected to an event (namely, the transaction) that produced a significant long-term benefit. To the extent that petitioner relies on cases such as Briarcliff Candy Corp. v. Commissioner, 475 F.2d 775 (2d Cir. 1973), and NCNB Corp. v. United States, 684 F.2d 285 (4th Cir. 1982), for a different result, petitioner's reliance is misplaced. We read INDOPCO to have displaced the body of law set forth in Briarcliff Candy and its progeny insofar as they allowed deductibility of investigatory costs in a setting similar to that at hand; i.e., where an expenditure does not create a separate and distinct asset. Accord FMR Corp. & Subs. v. Commissioner, 110 T.C. 402 (1998). The Supreme Court granted certiorari in INDOPCO to resolve the conflict among the Courts of Appeals on the requirements for capitalization in the absence of a separate and distinct asset. The Supreme Court in INDOPCO required that an expense be capitalized when it produces a significant long-term benefit, even when, as is the case here, the expense does not produce a separate and distinct asset. Petitioner's position on the timing of the investigatory fees is similar to an argument that was rejected by the courts in Ellis Banking Corp. v. Commissioner, T.C. Memo. 1981-123. There, the taxpayer was a bank holding company that, under State law, had to acquire the stock of other banks or organize new banks in order to expand its business into new geographic markets. The taxpayer agreed with another bank (Parkway) and certain of Parkway's shareholders to acquire all of Parkway's stock in exchange for taxpayer stock. The agreement was contingent on the occurrence of certain events. Before the acquisition, but incident thereto, the taxpayer incurred various expenses conducting a due diligence examination of Parkway's books. These expenses were for office supplies, filing fees, travel expenses, and accounting fees. The taxpayer deducted these expenses, and the Commissioner disallowed the deduction. The Commissioner determined that the expenses had to be capitalized. We sustained the Commissioner's disallowance. We held that the expenses were capital in nature because they were incurred incident to the acquisition of a capital asset. The Court of Appeals for the Eleventh Circuit agreed. The taxpayer had argued that the expenses were "ordinary and necessary" because they were incurred in connection with its decision to acquire the stock and in evaluating the market in which Parkway was located. Ellis Banking Corp. v. Commissioner, 688 F.2d at 1381. The taxpayer noted that the expenses were incurred before it was bound to buy Parkway's stock. The Court of Appeals, in rejecting the taxpayer's claim to current deductibility, stated that the expenses of investigating a capital investment are properly allocable to that investment and must therefore be capitalized. That the decision to make the investment is not final at the time of the expenditure does not change the character of the investment; when a taxpayer abandons a project or fails to make an attempted investment, the preliminary expenditures that have been capitalized are then deductible as a loss under section 165. * * * As the First Circuit stated, “... expenditures made with the contemplation that they will result in the creation of a capital asset cannot be deducted as ordinary and necessary business expenses even though that expectation is subsequently frustrated or defeated." Union Mutual, 570 F.2d at 392 (emphasis in original). Nor can the expenditures be deducted because the expectations might have been, but were not, frustrated. [Id. at 1382.] Nor does our reading of section 195 support a contrary conclusion. Recently, in FMR Corp. & Subs. v. Commissioner, supra, we addressed the applicability of section 195 in a context analogous to the setting at hand, holding that section 263(a) required that the taxpayer capitalize the costs which it incurred in developing and launching 82 new regulated investment companies (RIC's). The costs were incurred in a series of activities starting with the development of the idea for the new RIC and continuing with the development of the initial marketing plan, drafting of the management contract, formation of the RIC, obtaining the board of trustees' approval of the contract, and registering the new RIC with the SEC and the States in which the RIC would be marketed. Id. at 413. The taxpayer had argued that section 195 allowed for the current deductibility of all these costs because, it asserted, they were incurred in expanding an existing business. We disagreed. We held that section 195 does not require "that every expenditure incurred in any business expansion is to be currently deductible." Id. at 429. In sum, we hold that DBTC may not deduct any of the disputed costs because all costs were sufficiently related to an event that produced a significant long-term benefit. Although the costs were not incurred as direct costs of facilitating the event that produced the long-term benefit, the costs were essential to the achievement of that benefit. We have considered all arguments by petitioner for a contrary holding, and, to the extent not discussed above, find them to be irrelevant or without merit. To reflect the foregoing, Decision will be entered under Rule 155. INTERLAKE CORPORATION, SUCCESSOR IN INTEREST TO REVENUE, RESPONDENT Docket No. 8258-96. Filed March 18, 1999. a P, as the result of a restructuring transaction, became the successor common parent of a consolidated group of corporations (the group). A, the former common parent of the group, became a wholly owned subsidiary of P. P then distributed, pro rata, to its shareholders, all of the issued and outstanding common shares of A, which became, as a result of the spinoff, a separate publicly traded corporation. Subsequent to the restructuring transaction, P and the group incurred a consolidated net operating loss (CNOL). P filed an application under sec. 6411, I.R.C., for a tentative refund of income tax attributable to the carryback of the postrestructuring transaction CNOL to 1984, a prespinoff year during which A controlled the group. A and its new group also incurred postrestructuring transaction CNOL for which A filed an application under sec. 6411, I.R.C., for a tentative refund of income tax attributable to the carryback of its postrestructuring transaction CNOL to 1981 and 1984, prespinoff years during which A controlled the group. After review by the Internal Revenue Service, the requested tentative refunds were issued to P and A, respectively. The tentative refunds issued to A were treated as rebate refunds with respect to P and the group for purposes of computing the group's deficiencies for 1981 and 1984. P contends that the tentative refunds in issue were paid to the wrong taxpayer, and therefore the tentative refunds do not constitute rebate refunds. R concedes that a refund issued to the wrong taxpayer, or to an unauthorized representative of the taxpayer, is a nonrebate refund that may not be taken into account in determining the taxpayer's deficiency. However, R contends that payment to A was proper because A was an authorized representative of the group for purposes of the issuance of the tentative refunds. Held: The tentative refunds constitute nonrebate refunds with respect to P and the group because A's authority to act for the group, at least with respect to the issuance and receipt of the tentative refunds, terminated when A's affiliation with the group terminated. Accordingly, A John M. Newman, Jr., and Kenneth E. Updegraft, Jr., for petitioner. Lawrence C. Letkewicz, for respondent. OPINION WELLS, Judge: This matter is before the Court on the parties' cross-motions for summary judgment pursuant to Rule 121(a). Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the taxable years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Respondent determined deficiencies in the Federal income tax of Interlake Corp. and its consolidated subsidiaries as follows: After concessions by petitioner, only the deficiencies with respect to 1981 and 1984 remain in issue. We must decide whether certain tentative refund allowances that were paid to Acme Steel Co. (formerly Interlake, Inc.), with respect to taxable years 1981 and 1984 constitute rebates to petitioner, Interlake Corp. (successor in interest to Interlake, Inc.), and its consolidated subsidiaries, for purposes of computing petitioner's deficiency, if any, for taxable years 1981 and 1984. Summary judgment may be granted if the pleadings and other materials demonstrate that no genuine issue exists as to any of the material facts and that a decision may be entered as a matter of law. See Rule 121(b); Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d |