Full opinion text
MEMORANDUM OPINION PAYNE, District Judge. Plaintiff, Trigon Insurance Company (“Trigon”), formerly known as Blue Cross and Blue Shield of Virginia, filed this action to recover federal income taxes, plus interest, alleged to have been erroneously overpaid in the years 1989 through 1995. The United States opposes the refund on several grounds. The dispute between the parties is over the meaning and effect of certain sections of the Tax Reform Act of 1986 (the “1986 Act”) which, for the first time, subjected Blue Cross and Blue Shield health care insurance organizations to federal income taxation. The core issues are matters of first judicial impression and, therefore, it is useful to recount the factual background in which those issues arose as well as the background of the 1986 Act. I. BACKGROUND A. The Evolution Of The Blue Cross/ Blue Shield Organizations In Virginia, The Competition Between Them And Their Merger To Form What Is Now Trigon Trigon’s two corporate predecessors, both Blue Cross and Blue Shield organizations (hereinafter referred to as “Blue Cross/Blue Shield”), were incorporated in the Commonwealth of Virginia in 1935 and 1945, respectively. During the years before 1986, three separate Blue Cross/Blue Shield plans operated in Virginia: Blue Cross/Blue Shield of the National Capital Area in northern Virginia (the “DC Plan”), Blue Cross/Blue Shield of Virginia in the eastern and central portions of Virginia (the “Richmond Plan”), and Blue Cross/ Blue Shield of Southwestern Virginia (the “Roanoke Plan”). The relationship among these three companies was governed, in part, by the separate license agreements between each plan and the Blue Cross/ Blue Shield Association (“BCBSA”). The BCBSA licensed the rights to use the Blue Cross name and service mark and the Blue Shield name and mark under separate agreements. Before 1986, the Richmond and Roanoke Plans operated independently in the territory that Trigon now controls. Before 1983, competition between the Richmond and Roanoke plans was prohibited by state law. Thus, each plan operated exclusively in different geographic regions. In 1983, the Virginia legislature amended the state law to eliminate the territorial restrictions on the activities for the Richmond and Roanoke Plans, thereby allowing the two plans to compete directly against each other. As a result of the change, beginning in approximately July of 1983, the two plans engaged in a period of unusually intense competition. This fierce “interplan competition” was conducted principally by offering significant premium discounts in an effort to penetrate, and to establish a significant presence in, the territory formerly occupied exclusively by the rival plans. To that end, both the Richmond and Roanoke Plans offered sizeable competitive premium discounts that were lower than the premiums otherwise set by the actuarial and underwriting departments. The Roanoke Plan, which was smaller than the Richmond Plan, was the more aggressive of the two; and many of the discounted premiums offered by the Roanoke Plan were so significant that the premiums were insufficient to cover the claims and administrative costs expected under the contracts. The Richmond Plan tracked its discounts on an account-by-account basis, keeping records reflecting the difference between the premiums actually charged and those that would have been charged, but for the competition. The Roanoke Plan did not do that. The intensity of the interplan competition was so great that the commercial health insurers operating in Virginia ceased active marketing within the geographic regions covered by the two plans during this period. As a result of their aggressive pricing strategies during the interplan competition and the corresponding absence of competition from commercial insurers, total enrollment for both the Richmond and Roanoke Plans grew during the period 1983 to 1985. By late 1985, however, the Roanoke Plan was near financial collapse as a result of the interplan competition and its unsound pricing policies. Consequently, the Roanoke Plan approached the Richmond Plan with a proposal to consolidate. In September 1985, the Plans entered into an affiliation agreement and formally merged in March 1986. Trigon formed Consolidated Healthcare, Inc. (“CHI”) in early 1986 as an affiliated management company to facilitate the merger between the two plans. The consolidation began in early 1986 and was not completed until the middle of 1987. Following the merger, the combined company began to manage the Roanoke Plan’s business by offering the same products and using the same pricing methodology that the Richmond Plan used. Wood Tr. 11/15/01 855:5-18. B. The 1986 Act And Trigon The merged company immediately faced a changed tax landscape. Specifically, before 1987, Blue Cross/Blue Shield organizations were exempt from federal income tax pursuant to sections 501(a) and (c) of the Internal Revenue Code of 1954 (“I.R.C.” or “the Code”). As part of the 1986 Act, Congress determined that Blue Cross/Blue Shield organizations should become subject to federal income taxation beginning with their first taxable years after December 31, 1986. Congress implemented this decision by enacting section 501(m) of the Code. When it subjected Blue Cross/Blue Shield organizations to income tax, Congress enacted a number of transitional rules, including section 1012 (c) (3) (A) (ii) of the 1986 Act (the “Fresh Start Basis Rule”) which provides that: for purposes of determining gain or loss, the adjusted basis of any asset held on the 1st day of such taxable year shall be treated as equal to its fair market value as of such day. The purpose behind the Fresh Start Basis Rule was to prevent any unrealized gain or loss that had accrued while a Blue Cross/Blue Shield organization was exempt from tax from being factored into the determination of tax liability once it became a taxpayer. See H.R. Conf. Rept. 814, 99th Cong., 2d Sess. Vol. II at 350, reprinted in 1986 U.S.C.C.A.N. 4075, 4437-38 (“The basis adjustment is provided because the conferees believe that such formerly tax-exempt organizations should not be taxed on unrealized appreciation or depreciation that accrued during the period the organization was not generally subject to income taxation.”). By requiring that the basis of each asset held on January 1, 1987 be adjusted to its fair market value on that date, the Fresh Start Basis Rule ensures that taxable income or loss of a Blue Cross/Blue Shield organization will be based solely on items of income and loss that economically accrue after the organization became subject to federal income tax. Trigon’s taxable year coincides with the calendar year, thus its first taxable year beginning after December 31, 1986, was the calendar year that began January 1, 1987. Pursuant to the Fresh Start Basis Rule, Trigon’s basis in each asset owned on January 1, 1987, was equal to the asset’s fair market value on that date. In 1987, after the merger of the two Plans and after the 1986 Act took effect, Trigon began to identify its assets so as to apply the Fresh Start Basis Rule in filing federal income tax returns. This task was assigned to Stephen Meyer, director of corporate tax, who undertook to “understand the new tax law and its ramifications and implications to the plan and to explain that to management.” Meyer Tr. (11/13/01) 342:2-4. As a result, by late 1987 or early 1988, Trigon had identified as among its assets, the contracts with subscribers (Trigon’s customers) and providers (the doctors and hospitals who agreed to provide service to Trigon subscribers). Meyer Tr. (11/13/01) 345:23-346:2; 347:1-2. Trigon has claimed, at various times that, on January 1, 1987, it owned between 20,000 and 24,000 group health insurance subscription contracts organized into the following lines of business: (1) Community Rated groups; (2) Local Experience Rated contracts; (3) Local Cost plus contracts; (4) Small Business contracts; (5) Control National contracts; (6) Participating National contracts; (7) the State of Virginia account; (8) the Federal Employee Program; and (9) Large Accounts (Local Experience Rated, Control National, and Local Cost Plus).: Defense Exh. 103 at TR46012165. Even now, after extensive and exhaustive pre- and post-trial briefing, as well as teleconferences on this point, the precise number of group subscriber contracts actually owned by Trigon as of January 1, 1987 is difficult of ascertainment. For example, in its Proposed Findings of Fact ¶ 19, Trigon said that it owned 23,780 subscriber contracts which included a number of “sub-contracts,” thereby reducing to 21,-642 contractual relationships with subscriber groups. Trigon’s valuation expert valued 22,509 subscriber contracts. At trial, a Trigon witness said that the number ought to be reduced by “at least” or “approximately” 500. Hunt Tr. (11/13/01) 448:9-449:18. When, in August 2002, Trigon was asked to supply citations in the record to document the number of subscriber contracts owned, Trigon responded in a letter dated August 6, 2002, that the 22,509 number used by the valuation expert ought to be reduced, and not by 500, but by 793. Thus, as of August 6, 2002, Trigon claims that the number of subscriber contracts actually owned on January 1, 1987, was 21,716. See Letter from Gilbert E. Sehill, Jr., counsel for Trigon, dated August 6, 2002. Trigon also carried contracts with physician and hospital providers of health care services. These provider contracts allowed Trigon to reimburse the physicians and hospitals at rates below what the providers typically charge for their services. Having a broad provider network was also a significant factor in marketing Trigon’s health insurance contracts. See Bilbray Tr. (11/16/01) 1178:14-23; Slone Tr. (11/13/01) 311:13-312:9. Trigon had two types of contracts with physician providers, “Key Care” contracts and “Participating” contracts. In some instances, Trigon owned both Key Care and Participating provider contracts with the same physician. The total number of physicians with whom Trigon owned provider contracts on January 1, 1987 (either Key Care, Participating or both), was 9,436. Trigon’s provider contracts with hospitals and other health care facilities, included a contract with Smyth County Community Hospital, under which those facilities agreed to provide health care services to Trigon’s members in exchange for negotiated payments. The total number of hospital or health care facility provider contracts was 278. From time to time after January 1,1987, these contracts were terminated, most often by the subscriber or provider, but occasionally by Trigon. When filing its federal income tax returns for the years 1987 through 1995, Trigon did not claim as losses the value of contracts terminated in any of those nine years. However, on November 14, 1996, Trigon filed amended federal income tax returns for the years 1987 through 1995 claiming loss deductions for the value of contracts terminated in the years 1987 through 1995. In explaining why Trigon did not initially claim these terminated contracts as loss deductions, Phyllis Cothran, Trigon’s Chief Financial Officer at the time, testified that “there was so little guidance from the IRS at that time as to how to proceed with those type deductions that Steve Meyer had talked to me about that and said with everything, that we should move slowly and cautiously and wait until guidelines were issued and wait until we understood those and work with other Blue Cross Blue Shield plans and any outside expertise that he needed.” Cothran Tr. (11/12/01) 220:3-11. “[W]e weren’t going to do anything until we’d had more time to think about it, wiser minds had more time to look at it.” Cothran Tr. (11/12/01) 266:23-267:1. The company’s records, accounting or otherwise, contain no statements setting forth the company’s views of these contracts, or their value, at or about the time that Trigon became subject to taxation, January 1,1987. In 1988, at Trigon’s request, Arthur Andersen performed a fair market valuation of personal property and intangible assets owned by Trigon on January 1, 1987. See Defense Exh. 25. The valuation attributed a value of $1,325,543,000 to Trigon’s subscriber contracts and $265,580,000 to the contracts that constituted Trigon’s provider network. Defense Exh. 25 at TR01020028. Arthur Andersen, in valuing the subscriber contracts, used the income approach and discounted cash flow method, calculating the average remaining life of the contracts, the income associated with the contracts in the future, and discounting the premiums back to present value as of January 1, 1987, with a discount rate identical to the one used by Michael C. Wierwille, Trigon’s valuation expert in this action. Defense Exh. 25 at TR01020038-39. Arthur Andersen also used the income approach in arriving at a value for the provider contracts. Using the cost savings of each of the physician and facility contracts, Arthur Andersen determined that the value of the physician provider contracts was $194,811,000 and the value of the facility provider contracts was $70,769,000, for a total of $265,580,000. Defense Exh. 25 at TR01020040. C. The 1996 Claim To Refund And This Action In November 1996, Trigon timely filed administrative claims for refund pursuant to 26 U.S.C. § 6511 for the 1989 through 1995 tax years with respect to loss deductions arising from the cancellation, abandonment or termination of indemnity group health insurance subscription contracts, physician provider contracts and a hospital provider contract. The claimed deductions were based in part on the values of the terminated contracts described by Arthur Andersen in 1988. Meyer Tr. (11/16/01) 1114:2-23. The Internal Revenue Service (“IRS”) denied those claimed deductions though it had agreed to apply the Fresh Start Basis Rule to some of Trigon’s other internally developed intangible assets at an earlier point; namely, Trigon’s internally developed computer software. See Technical Advice Memorandum 9533003 (May 2, 1995). Eventually, Trigon and the IRS reached a compromise on the treatment of losses arising in connection with the subscriber and provider contracts. However, the Congressional Joint Committee on Taxation effectively rejected that agreement. The administrative claims were subsequently denied by the IRS and Trigon filed this action seeking a refund. The Complaint seeks a refund in the amount of “at least $61,649,000” but, by agreement, the sum sought just before trial was adjusted to $35,188,255. After Trigon produced a revised valuation of the subscriber contracts at trial (see Plaintiffs Exh. 282A) prepared by Wierwille, Trigon’s valuation expert, Dennis van Mieg-ham, Trigon’s tax computation expert, submitted a revised refund amount of $33,181,966. Plaintiffs Exh. 297A. The basis for the loss deduction claimed by Trigon and disallowed by the IRS are Trigon’s contentions that, on January 1, 1987: (1) Trigon owned 22,509 group health insurance subscription contracts, and that between January 1, 1987, and December 31, 1995, 15,998 of the contracts were lost, the estimated loss, measured by the fair market value of such contracts on January 1, 1987, being $175,147,656; and (2) Trigon owned provider contracts with 9,436 physicians, each of whom held a “Participating” contract, a “Key Care” contract or both, and that between January 1, 1987, and December 31, 1995, 3,381 of the contracts were lost, the estimated loss, measured by the fair market value of such contracts on January 1, 1987, being $207,896; and (3) Trigon also owned contracts with hospitals and other health care facilities throughout Virginia, many of which had multiple contracts with Trigon and that the contract with Smyth County Community Hospital was lost between January 1, 1987, and December 31, 1995, the estimated loss, measured by the fair market value of the contract on January 1, 1987, being $36,507. In essence, Trigon’s Complaint presents the following basic theory in support of its claim for refund: On January 1, 1987, Trigon owned intangible assets in the form of health insurance subscriber and provider contracts; each of those contracts had a determinable fair market value on January 1, 1987; some of the contracts owned by Trigon on January 1, 1987, were lost by virtue of contract terminations during the 1987 through 1995 tax years; and the tax deductions for losses arising from the terminated contracts translate into federal income tax refunds for the 1989 through 1995 tax years. The United States argues that, as a matter of law, the stepped-up basis provided by § 1012(c)(3)(A) is not available for tax deductions based on the alleged “cancellation, abandonment or termination” of the contracts at issue; and further: (1) that Trigon did not establish that the “cancellation, abandonment or termination” of Trigon’s contracts constituted a tax deductible loss under the Internal Revenue Code; (2) that, because there is no market for the individual contracts, no fair market value can be ascertained; (3) that each contract is not an individual asset and cannot be valued separately; and (4) that Trigon did not meet its burden to prove, by a preponderance of the evidence, a reliable value for the contracts it owned as of January 1,1987. The facts found above will be used in resolving the several issues presented for decision. However, most of the issues require further factual findings and those findings will be made as part of the discussion of the issues to which they relate. II. DISCUSSION A. Section 1012(c) Of The 1986 Act Gave Trigon A Fresh Start Basis In All Of Its Assets As Of January 1, 1987, Including The Subscriber And Provider Contracts At Issue Here When, by enacting the 1986 Act, Congress implemented its determination that Blue Cross/Blue Shield organizations should become subject to federal income taxation beginning with their first taxable year beginning after December 31, 1986, Congress also enacted a series of other statutory provisions that prescribe with considerable specificity the manner in which the transition of Blue Cross/Blue Shield organizations from nontaxable status to taxable status would occur. Among the detailed rules that Congress provided for the transition of Blue Cross/Blue Shield organizations to taxable status is the Fresh Start Basis Rule, which states: [F]or purposes of determining gain or loss, the adjusted basis of any asset held on the 1st day of such taxable year [the first taxable year beginning after December 31, 1986] shall be treated as equal to its fair market value as of such day. 26 U.S.C. § 1012(c)(3)(A)(ii). Before assessing Trigon’s claim for refund, it is necessary to confront several threshold issues presented by the United States. 1. Are Trigon’s Subscriber And Provider Contracts Assets? From time to time in this action, the United States has asserted that Trigon’s subscriber and provider contracts are not assets and, for that reason alone, they are not amenable to treatment under the Fresh Start Basis Rule. Most recently, the United States appears to have eschewed this categorical theory and, instead, has adopted the refinement that the individual contracts are not assets because there is no market for individual contracts of this sort. This, in turn, says the United States, forecloses a fair market value of the individual contracts. That issue will be considered later in this Memorandum Opinion, but, to the extent that the United States continues to press the categorical assertion that individual contracts cannot be assets at all, the theory is rejected as erroneous. By its terms, the Fresh Start Basis Rule applies to “any asset” held by Trigon on January 1, 1987. The term “asset” means “[a]n item of value owned.” Webster’s Third New International Dictionary, 131 (3d Ed.1986). The Tax Court has held, and the IRS has acknowledged, that contracts similar to Trigon’s subscriber contracts, are assets for federal income tax purposes. See Union Bankers Ins. Co. v. Commissioner, 64 T.C. 807, 1975 WL 3176 (1975), acq., 1976-2 C.B. 3; Rev. Rul. 76-411, 1976-2 C.B. 208, 1976 WL 36762. Furthermore, courts have treated other types of contractual relationships as separate assets, whether or not evidenced by a written contract. See, e.g., Super Food Services, Inc. v. United States, 416 F.2d 1236 (7th Cir.1969) (treating distributor contracts as separate assets); Commissioner v. Seaboard Finance Corp., 367 F.2d 646 (9th Cir.1966) (treating consumer loan contracts as separate assets); Hoffman v. Commissioner, 48 T.C. 176, 1967 WL 929 (1967) (treating contracts for the location of vending machines as separate assets); North American Service Co. v. Commissioner, 33 T.C. 677, 1960 WL 1066 (1960), acq., 1960-2 C.B. 6 (holding that taxpayer was entitled to a fair market value basis in service contracts received upon liquidation of corporation); Silling v. Commissioner, 27 T.C. 701, 1957 WL 897 (1957) (holding that contracts for the performance of services were assets and thus entitled to a stepped-up basis when received by a partner upon termination of a partnership, even though contracts had a zero basis in the hands of the partnership). Because Trigon’s subscriber contracts produce value to the owner and they can be transferred for consideration, Trigon’s subscriber contracts, both individually and in blocks, clearly are assets. The provider contracts are also assets to be considered because they too produce value, the value being a provider network that ultimately saves subscribers and Trigon money and attracts subscribers to the Company. 2. The Fresh Start Basis Rule Applies To More Than Just Sales And Exchanges The losses claimed by Trigon arise as a result of the termination or cancellation of subscriber and provider contracts. In filing its Amended Tax Returns, Trigon represented to the IRS that “[a] deduction is being taken for abandonment of appraised assets that consist of terminated contracts.” Plaintiffs Exhs. 1-5. In other words, Trigon seeks what has been termed an “abandonment loss deduction” that is permitted under I.R.C. § 165, as it is implemented by Treasury Regulation § 1.165-2(a) which provides in pertinent part that: A loss incurred in a business or in a transaction entered into for profit and arising from the sudden termination of the usefulness in such business or transactions of any nondepreciable property, in a case where such business or transaction is discontinued or where such property is permanently discarded from use therein, shall be allowed as a deduction under section 165(a) for the taxable year in which the loss is actually sustained. The next part of the Treasury Regulation expressly provides that “[t]his section does not apply to losses sustained upon the sale or exchange of property.” Treas. Reg. § 1.165 — 2(b). Citing that language and seizing upon one sentence in the legislative history of the 1986 Act stating that the Fresh Start Basis Rule applies only to determine a gain or loss on the sale or exchange of property, the United States argues that Trigon is not entitled to use the Fresh Start Basis Rule provided in § 1012(c)(3)(A) of the 1986 Act. The linchpin of the argument presented by the United States is the Conference Report to the 1986 Act, which in the following passage headed “Basis of assets,” states: the basis of assets of such organizations is equal, for purposes of determining gain or loss, to the amount of the assets’ fair market value on the first day of the organization’s taxable year beginning after December 31, 1986. Thus, the formerly tax-exempt organizations utilizing a calendar period of accounting and whose first taxable year commences January 1, 1987, the basis of each asset of such organization is equal to the amount of its fair market value on January 1, 1987. The basis step-up is provided solely for purposes or determining gain or loss upon sale or exchange of the assets, not for purposes of determining amounts of depreciation or for other purposes. The basis adjustment is provided because the conferees believe that such formerly tax exempt organizations should not be taxed on such unrealized appreciation or depreciation that accrued during the period the organization was not generally subject to income taxation. 2 H.R. Conf. Rept. 841, 99th Cong.2d Sess. 11-350 reprinted in U.S.C.C.A.N. 4075, 4437-38 (emphasis supplied). Clearly, the language in the Conference Report is at odds with the statutory text that establishes the Fresh Start Basis Rule, which says that the step up in basis applies “for purposes of determining gain or loss,” without in any way limiting the kind of gain or loss to be determined. The inconsistency must be resolved by resort to familiar rules of statutory construction. As explained below, when that is done, the argument of the United States fails. Statutory interpretation, of course, begins “by examining the statutory language, bearing in mind that [a court] should give effect to the legislative will as expressed in the language.” United States v. Murphy, 35 F.3d 143, 145 (4th Cir.1994), cert. denied, 513 U.S. 1135, 115 S.Ct. 954, 130 L.Ed.2d 897 (1995) (citing K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291, 108 S.Ct. 1811, 1817, 100 L.Ed.2d 313 (1988)). The judicial task is to determine whether the statutory “language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.” Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 846, 136 L.Ed.2d 808 (1997). And, the court’s inquiry must end if the statutory language is unambiguous and “the statutory scheme is coherent and consistent.” Id. (citing United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 240, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989)); see also Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253-254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992); Robinson v. Shell Oil Co., 70 F.3d 325, 329 (4th Cir. 1995) (en banc), rev’d on other grounds, 519 U.S. 337, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). When the statutory language is “facially clear and ‘within the constitutional authority of the law-making body which passed it, the sole function of the courts is to enforce it according to its terms.’ ” Murphy, 35 F.3d at 145 (quoting Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 194, 61 L.Ed. 442 (1917)). Here, there is no question of constitutional authority and thus the only question is the clarity of the statutory text. To ascertain whether the statutory language is clear or ambiguous, the courts look to “the language [of the statute] itself, the specific context in which that language is used, and the broader context of the statute as a whole.” Robinson, 519 U.S. 337, 342, 117 S.Ct. 843, 846, 136 L.Ed.2d 808 (1997) (citing Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 477, 112 S.Ct. 2589, 2595, 120 L.Ed.2d 379 (1992); McCarthy v. Bronson, 500 U.S. 136, 139, 111 S.Ct. 1737, 1740, 114 L.Ed.2d 194 (1991)). Words used by Congress are typically given their common usage meaning. Murphy, 35 F.3d at 145 (citing Palestine Info. Office v. Shultz, 853 F.2d 932, 938 (D.C.Cir.1988)). It is also true that Congress is presumed to know the existing statutory framework into which an amending statute fits. As the Supreme Court explained in Molzof v. United States, 502 U.S. 301, 307, 112 S.Ct. 711, 716, 116 L.Ed.2d 731 (1992), a cardinal .rule of statutory construction holds that: [WJhere Congress borrows terms of art in which are accumulated the legal tradition and meaning of centuries of practice, it presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it was taken and the meaning its use will convey to the judicial mind unless otherwise instructed. In such case, absence of contrary direction may be taken as satisfaction with widely accepted definitions, not as a departure from them. Id. (quoting Morissette v. United States, 342 U.S. 246, 263, 72 S.Ct. 240, 250, 96 L.Ed. 288 (1952), and citing as additional authority NLRB v. Amax Coal Co., 453 U.S. 322, 329, 101 S.Ct. 2789, 2794, 69 L.Ed.2d 672 (1981); Braxton v. United States, 500 U.S. 344, 351, n. *, 111 S.Ct. 1854, 1859, n. *, 114 L.Ed.2d 385 (1991)). Of course, the tax code is not centuries old, but it is nearing its first centennial anniversary and the principal recited by in Molzof is certainly applicable where, as here, the statutory scheme is well-settled and oft-addressed by Congress. See United States v. Neustadt, 366 U.S. 696, 707-08, 81 S.Ct. 1294, 1301, 6 L.Ed.2d 614 (1961) (“Certainly there is no warrant for assuming that Congress was unaware of established tort definitions when it enacted the Tort Claims Act in 1946, after spending ‘some twenty-eight years of congressional drafting and redrafting, amendment and counter-amendment.’ ”) (quoting United States v. Spelar, 338 U.S. 217, 219—220, 70 S.Ct. 10, 11, 94 L.Ed. 3 (1949)); see also Molzof, 502 U.S. at 307, 112 S.Ct. at 716. The introductory clause of § 1012(c) (3) (A) (iii) articulates that its Fresh Start Basis Rule is to be used “for purposes of determining gain or loss.” The statutory text imposes no limit on the kind of gain or loss to which the Fresh Start Basis Rule applies. The common usage of the words “gain or loss,” without limitation, plainly includes any gain or loss. And, because the statute concerns specifically Blue Cross/Blue Shield organizations, that plain language means any gain or loss respecting Blue Cross/Blue Shield assets as to which gain or loss is pertinent in establishing federal income tax liability to which Blue Cross/Blue Shield organizations were, for the first time, being subjected. Thus, the statutory language at issue, given its ordinary meaning, is plain and unambiguous. Significantly, the United States does not contend otherwise. Instead, the inconsistency relied on by the United States is created not by the text of statute but by a passage in the legislative history, which states the “basis step-up is provided solely for purposes of determining gain or loss upon sale or exchange of the assets.” 2 H.R. Conf. Rept. 841, 99th Cong.2d Sess. 11-350 reprinted in U.S.C.C.A.N. 4075, 4437-38 (emphasis supplied). However, courts should not interpret a statute by reference to legislative history where, as here, the statutory language is unambiguous and “the statutory scheme is coherent and consistent.” Murphy, 35 F.3d at 145 (citing United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 1030, 103 L.Ed.2d 290 (1989)). As explained above, the statutory text is clear and it does not support the statutory construction urged by the United States. If it were necessary to go further (which it is not), it is clear that the plain statutory text is fully consistent with the statutory context of the provision at issue and is consonant with the purpose of the statute, namely, to prevent any unrealized gain or loss that had accrued while a Blue Cross/Blue Shield organization was exempt from tax from being included in the calculation of tax liability once the company became subject to tax. See H.R. Conf. Rept. 814, 99th Cong., 2d Sess. Vol. II at 350, reprinted in 1986 U.S.C.C.A.N. 4075, 4437-38. Moreover, the broader context of the 1986 Act was to subject Blue Cross/ Blue Shield organizations taxable under federal tax law just as were the commercial insurers with whom the Blue Cross/ Blue Shield organizations were in competition. That body of law includes a comprehensive set of rules respecting permissible loss deductions and nothing in the text of the Fresh Start Basis Rule or the 1986 Act suggests that Congress intended to make that body of rules, or any part of them, inapplicable to Blue Cross/Blue Shield organizations. It would be inconsistent with the Congressional objectives reflected in the 1986 Act to interpret § 1012(c)(3)(A)(ii) to impose limits on the kinds of gains and losses to which its Fresh Start Basis Rules apply. This view of the statute is underscored by the familiar principle that Congress is presumed to be aware of existing statutory provisions when it enacts amending legislation. See Molzof, 502 U.S. at 307, 112 S.Ct. at 716; Neustadt, 366 U.S. at 707-08, 81 S.Ct. at 1301; Spelar, 338 U.S. at 219-20, 70 S.Ct. at 11. Nowhere is that concept more applicable than in the complex federal income tax statutes as to which Congress is often and extensively involved. Without doubt, when Congress passed the 1986 Act, it was familiar with I.R.C. Section 165 and its implementing regulations permitting and regulating deductions for business losses. Thus, Congress was no doubt aware that Section 165 and its implementing regulations had long permitted deductions for business losses other than those sustained on the sale or exchange of property. If Congress had intended to limit application of the Fresh Start Basis Rule to gains or losses incurred in sale or exchange transactions, it certainly could have done so in the statute. Indeed, it would have been a simple matter to have included in the statute language such as that which appears in the Conference Report. Congress, however, did not do so and it -is not the office of the judiciary to conclude that Congress inadvertently failed to include that significant limitation in the statutory text and then, as the United States urges, correct that oversight. To follow that course here would be inappropriate for the additional reason that Congress is no stranger to enacting taxation statutes providing for a stepped up basis. Indeed, the Fresh Start Basis Rule is similar to other tax statutes enacted over the years that have permitted or required taxpayers to adjust asset basis to fair market value when the taxpayers became subject to tax. For instance, when first subjecting assets obtained before March 1, 1913, to taxation, an asset’s basis for purposes of determining gain would be its fair market value as of March 1, 1913: In the case of property acquired before March 1, 1913, if the basis otherwise determined under this subtitle, adjusted (for the period before March 1, 1913) as provided in section 1016, is less than the fair market value of the property as of March 1, 1913, then the basis for determining gain shall be such fair market value. 26 U.S.C. § 1053. As a result of the adjustment in basis of assets acquired before March 1, 1913, taxpayers computed losses based on an asset’s value as of such date, regardless of its original cost. See Burnet v. Houston, 283 U.S. 223, 51 S.Ct. 413, 75 L.Ed. 991 (1931); Lucas v. Alexander, 279 U.S. 573, 49 S.Ct. 426, 73 L.Ed. 851 (1929). As a consequence of this rule, any appreciation or gain in an asset that economically accrued prior to the enactment of the federal income tax was permanently excluded from income tax. 26 U.S.C. § 1053. A more recent example of Congressional familiarity with the stepped-up basis for gains or losses when providing for the transition of an organization from tax-exempt to taxable status occurred when Congress eliminated the federal income tax exemption for the Federal Home Loan Mortgage Corporation (“Freddie Mac”) in 1984. In doing so, Congress provided for an adjustment to the basis in each asset held by Freddie Mac on January 1, 1985. The statute provides that: [T]he adjusted basis of any asset of the Federal Home Loan Mortgage Corporation held on January 1, 1985, shall— (i) for purposes of determining any loss, be equal to the lesser of the adjusted basis of such asset or the fair market value of such asset as of such date, and (ii) for purposes of determining any gain, be equal to the higher of the adjusted basis of such asset or the fair market value of such asset as of such date. Deficit Reduction Act of 1984, Pub.L. No. 98-369, § 177(d)(2), 98 Stat. 494, 709-712 (1984). Thus, the history of federal income tax legislation demonstrates that, when Congress has intended to limit the applicability of a transitional basis adjustment, it has employed specific language to do so. That certainly was the case before Congress passed the 1986 Act. It was only two years after passing the Freddie Mac legislation that Congress enacted a different basis adjustment regime for Blue Cross/Blue Shield organizations. In contrast to the Freddie Mac basis rule, the Fresh Start Basis Rule applies without regard to the asset’s cost basis and requires use of the fair market value basis for purposes of determining loss as well as gain. It is not to be presumed that Congress was unmindful of the differing treatments it had given stepped-up basis provisions before the 1986 Act. Furthermore, subsequent, but related events, are relevant to the analysis here. Specifically, it is important to recall that, when Congress subjected Blue Cross/Blue Shield organizations to tax under I.R.C. Section 501(m), Congress exempted the pension businesses of Mutual of America (“MOA”) and the Teachers Insurance Annuity Association-College Retirement Equities Fund (“TIAA-CREF”) from federal income tax. See 1986 Act §§ 1012(c)(4)(A), (B). However, in 1997, Congress eliminated the grandfather relief for MOA and TIAA-CREF, thereby subjecting those organizations to § 1012(c) of the 1986 Act, the same statutory provision that applies to Trigon. See Taxpayer Relief Act of 1997, Pub.L. No. 105-34, § 1042(b)(2), 111 Stat. 788 (“for purposes of determining gain or loss, the adjusted basis of any asset held on the 1st day of such taxable year shall be treated as equal to its fair market value as of such day.”). At that time, Congress provided MOA and TIAA-CREF with a transition rule worded identically to the Fresh Start Basis Rule at issue here. The legislative history of the 1997 amendment describes the Fresh Start Basis Rule applicable to Blue Cross/Blue Shield organizations as applying “for purposes of determining gain or loss,” making no reference to the “sale or exchange” limitation sought by the United States in this case. See H. Rep. No. 105-148, 105th Cong., 1st Sess. 495-96 (1997), U.S.Code Cong. & Admin.News 1997, 678, 889-90. The same legislative history also states that the rule for MOA and TIAA-CREF would apply “for purposes of determining gain or loss,” again making no reference to the United States’ “sale or exchange limitation.” Considering the plain and unambiguous statutory text, the context in which that language is used and the statutory framework of which it is a part, the Court would be rewriting the statute to give it the meaning urged by the United States. The statute means what it says, the Fresh Start Basis Rule applies in determining the gains or losses, incurred by Blue Cross/Blue Shield taxpayers, not just the gains or losses they incur on sales or exchanges of property. B. The Challenge Of The United States To The Nature Of the Claimed Losses Another threshold issue presented by the United States is whether the kind of loss claimed by Trigon is the kind of loss permitted by I.R.C. § 165. The first step in assessing that issue is to define the kind of loss claimed. In the Amended Tax Return that Trigon filed in November 1996, Trigon described the deduction as one that was “being taken for abandonment of appraised assets that consist of terminated contracts .... ” Plaintiffs Exhs. 1-5. The principal statutory authorization for the deductibility of losses generally is found in I.R.C. § 165(a), which provides: “There shall be allowed as a deduction any loss sustained during the taxable year and not compensated for by insurance or otherwise.” Section 165(b) provides that “the basis for determining the amount of the deduction for any loss shall be the adjusted basis provided in Section 1011 for determining the loss from the sale or other disposition of property.” Under Section 1011 of the Code and its implementing regulations, a taxpayer’s gain or loss from any sale or other disposition of an asset is to be determined under the general provisions of the Code, “or as otherwise specifically provided for under applicable provisions of internal revenue laws.” Treas. Reg. (26 C.F.R.) § 1.1011-1 (emphasis supplied). The Fresh Start Basis Rule is an applicable provision of the internal revenue laws “otherwise specifically” providing rules for determining a gain or loss. Accordingly, the Fresh Start Basis Rule applies for purposes of determining any loss that is otherwise claimable under Section 165 in respect of any asset held by Trigon on January 1,1987. Regulations further establish when the taxpayer is entitled to claim a loss under Section 165: A loss shall be allowed as a deduction under Section 165(a) only for the taxable year in which the loss is sustained. For this purpose, a loss shall be treated as sustained during the taxable year in which the loss occurs as evidenced by closed and completed transactions and as fixed by identifiable events occurring in such taxable year. Treas. Reg. § 1.165-l(d)(l). The regulations provide a deduction for: A loss incurred in a business or in a transaction entered into for profit and arising from the sudden termination of the usefulness in such business or transaction of any nondepreciable property, in a case where such business or transaction is discontinued or where such property is permanently discarded from use therein, shall be allowed as a deduction under Section 165(a) for the taxable year in which the loss is actually sustained. Treas. Reg. § 1.165-2(a) (emphasis supplied). It is this kind of loss that is at issue in this action. In order for such a loss to be deductible, it must be evidenced by a closed and completed transaction, fixed by an identifiable event, and sustained during the taxable year for which the loss is claimed. 26 C.F.R. § 1.165-l(b), (d). As the Sixth Circuit recently held, the identifiable event “must be observable to outsiders and constitute ‘some step which irrevocably cuts ties to the asset.’ ” United Dairy Farmers, Inc. v. United States, 267 F.3d 510, 522 (6th Cir.2001) (quoting Corra Resources, Ltd. v. Commissioner, 945 F.2d 224, 226-27 (7th Cir.1991)). The applicable regulation does not use the terms “cancellation,” “termination” or “abandonment” to describe the kind of loss for which a deduction is permitted. Rather, the regulation permits deductions of two sorts. First, there is a deduction for a loss incurred in a business or in a transaction entered into for profit and arising from the sudden termination of the usefulness in such business or transaction of any nondepreciable property, in a case where such business or transaction is discontinued. Second, it permits a deduction “where such property is permanently discarded from use [in the business or transaction].” Treas. Reg. § 1.165-2(a). The loss at issue here occurred by way of contract termination, not by permanently discarding of the contracts by Trigon. Thus, it is a loss of the type described in the first clause of the regulation. Trigon correctly argues that the cancellation or termination of a subscriber or provider contract is evidence of a closed and completed transaction and is an identifiable event within the meaning of Section 1.165—1(d)(1) of the regulations. Moreover, the cancellation or termination of a contract results in the sudden termination of its usefulness in Trigon’s business and, therefore, satisfies the requirements for deductibility described in Section 1.165-2(a) of the Regulations. Courts have recognized that the termination of a contract may result in a taxable loss under Section 165. See, e.g., George Freitas Dairy, Inc. v. United States, 582 F.2d 500 (9th Cir.1978) (where private quota system was abandoned and quotas became worthless, taxpaying dairies sustained losses deductible under 165.); Super Food, 416 F.2d at 1236 (taxpayer, which sold supplies to franchised grocers, would be entitled to loss deduction under 165 for termination of franchise contracts on showing of cost of contracts.); Forward Communications Corp. v. United States, 221 Ct.Cl. 582, 608 F.2d 485 (Cl.Ct.1979) (where television station bought by taxpayer had dual network affiliation at time of taxpayer’s purchase, the loss suffered by taxpayer upon termination of affiliation with one of the networks was a recognizable loss under 165(a), and taxpayer’s deduction for such loss was not barred as a result of the additional network revenues it received under its exclusive affiliation with the other network.); see also Metro Pictures Film Exchange, 1 B.T.A. 721, 1925 WL 769 (1925) (loss on termination of contract for distribution of motion pictures). In Super Food Services, Inc. v. United States, 416 F.2d 1236, 1241 (7th Cir.1969), the taxpayer sought to deduct, under 26 U.S.C. § 165(a), the losses it suffered from its termination of franchise contracts it had previously purchased from a third-party. The court, in allowing the deduction there at issue, relied on Treas. Reg. § 1.165-2, the same regulation on which Trigon relies. Super Food is in many ways similar to this case because in both cases, the contracts were terminated and valueless upon that termination, such termination having a specific date, the year of which the plaintiffs in both cases had to claim the deduction. Thus, Super Food provides an example of reasoning that allows Trigon to take loss deductions under Treas. Reg. § 1.165-2. In its Post-Trial Memorandum, the United States purports to rely on the position on this issue asserted in its pretrial Proposed Findings of Facts and Conclusions of Law and adds two other terse arguments. Each will be considered in turn, but, before turning to that task, it is appropriate to take a brief detour to explain terminology that permeates those arguments. In the vernacular of the tax lawyers’ world, the kind of loss at issue here is sometimes referred to as an “abandonment loss.” Abandonment is an act taken by the taxpayer and is the type of loss that is permitted, under the second sentence of Treas. Reg. § 1.165-2(a), when the taxpayer permanently discards an asset from use in its business. The arguments of the United States, and, to some extent, Trigon, do not differentiate between the two different events, cancellation or termination on the one hand, or permanently discarding or abandonment on the other. Nor do many of the decisions. The distinction between the kinds of events which give rise to the loss that is deductible is not of great significance in disposing of the arguments made by the United States, but it does somewhat becloud the real issue, which focuses on cancelled or terminated contracts, not on assets discarded by Trigon. First, the United States seems to disagree that there were tax deductible aban-donments, a position it does not support by further argument or any authority. By this, the United States seems to mean that the contract terminations are not abandon-ments because, immediately after a contract was terminated, Trigon undertook efforts (some successful, most not) to enter into new contracts with the terminating subscriber or provider. To qualify for the deduction when there is an abandonment, the taxpayer must show its intent to abandon the underlying asset. In Gulf Oil Corp. v. Commissioner, 914 F.2d 396, 402 (3d Cir.1990), the Third Circuit noted that “I.R.C. § 165 losses have been referred to as abandonment losses to reflect that some act is required that evidences an intent to discard or discontinue use permanently.” See also Kraft, Inc. v. United States, 30 Fed.Cl. 739, 785 (1994) (“Abandonment of an asset in tax law is defined as a permanent disposition, not sold, never to be used again and not retrieved for sale, exchange, or other disposition .... ”); CRST, Inc. v. Commissioner, 909 F.2d 1146, 1148 (8th Cir.1990) (“Section 165 requires both an intent to abandon the asset and an affirmative act of abandonment”); A.J. Industries, Inc. v. United States, 503 F.2d 660, 670 (9th Cir.1974) (“It has been repeatedly held that in order for a loss of an intangible asset to be sustained and to be deductible, there must be (1) an intention on the part of the owner to abandon the asset, and (2) an affirmative act of abandonment”). It is clear that Trigon systematically pursued contractual relationships with those who cancelled or terminated their subscriber or provider contracts and that Trigon continued to hope that the lost subscriber or provider would enter into a new contract. The record shows, for instance, that, when a subscriber group can-celled its Trigon coverage, the fact of the cancellation, as well as the reason for the cancellation and other pertinent information, was logged into the group’s account profile, which, in turn, was fed into the company’s group subscriber accounting system for use by the head of sales and other executives. Slone Tr. (11/13/01) 296:20-297:6, 302:22-304:1; Cothran Tr. (11/12/01) 267:2-269:24. A cancelled group would also immediately go into the sales department’s prospect database along with other businesses that had never had Trigon coverage. Slone Tr. (11/12/01) 297:7-19. Beyond question, Trigon wanted to secure new contracts with terminating subscribers and Trigon systematically pursued that objective. However, there was no way for Trigon to know if, or when, a cancelled group would ever decide to buy another Trigon contract. Slone Tr. (11/13/01) 298:11-14; Davis Tr. (11/12/01) 167:12-168:15. Indeed, as one might expect, it generally was more difficult to convince a group that had terminated its contract with Trigon to buy a new contract than it was to convince a group that had never had Trigon coverage to purchase coverage for the first túne. Convincing a cancelled group to buy a new contract was an “uphill battle.” Davis Tr. (11/12/01) 167:24-168:15. These undisputed facts, says the United States, establish that Trigon did not abandon the contracts for which it seeks the abandonment loss. To support this position, the United States relies principally on United Dairy Farmers, Inc. v. United States, 107 F.Supp.2d 937 (S.D.Ohio 2000), aff'd, 267 F.3d 510 (6th Cir.2001), and cites that decision as determinative of whether Trigon abandoned the assets at issue here. In United Dairy Farmers, the taxpayer commissioned, between 1986 and 1992, engineering .studies relating to various potential changes in an existing ice cream making facility. It deducted the costs for all of those studies in 1993, when it decided to construct another facility, claiming that construction of the other facility was the identifiable event evidencing abandonment of the studies; however, the taxpayer retained the facility to which the studies related. The district court denied the deduction, finding that the taxpayer had not truly abandoned the studies: The Court cannot square UDF’s position that the Erlanger project caused it to decide not to invest further in the Nor-wood plant when it commissioned a new [engineering] study soon after claiming the Erlanger project caused it to abandon the first [engineering] study. This action tends to show that UDF’s concept of whether a project has been abandoned is transitory in nature. United Dairy Farmers, Inc. v. United States, 107 F.Supp.2d 937, 946 (S.D.Ohio 2000). The district court held that the decision to construct the new facility was “not the ‘identifiable event’ which rendered the other studies worthless” and concluded that the taxpayer had not met its burden of showing that there was an identifiable event in 1993 that fixed the loss. Id., 107 F.Supp.2d at 945. The Court of Appeals affirmed the denial of the deductions on October 3, 2001, shortly after the parties submitted their pretrial briefs in this matter. United Dairy Farmers, Inc. v. United States, 267 F.3d at 523. Without doubt; Trigon systematically continued to pursue the re-establishment of relations with many of its subscribers and providers after they terminated their contracts; however, in contrast to the United Dairy Farmers decision, the termination or cancellation of a subscriber or provider contract was an identifiable event that completely changed the legal relationship between Trigon and the terminating subscriber or provider. Unlike the taxpayer in United Dairy Farmers, which retained the unilateral right to determine whether it would subsequently implement a study that it claimed to have abandoned, Trigon’s ability to obtain a new contract with a terminated group depended on decisions to be made by an unrelated party. Any new contract between Trigon and the group or provider, if such a contract should ever come into existence, would become an asset separate and distinct from the terminated contract. The ultimate termination or cancellation of the contract by the subscriber, provider or by Trigon represented the identifiable conclusion of the asset because the contract ended and there was no future income stream. The contracts at issue typically were year to year contracts the terms of which were renewed each year until there was a failure to renew or there was some other termination. Though year to year, the contracts, from a practical and realistic perspective, had an average life and an average value that could be ascertained given the conglomerated experience of a larger group of similar contracts. The end of that contract life is easily identifiable. If a subscriber or provider who had terminated or cancelled his contract with Trigon, again became a subscriber or provider of Trigon, a new contract would be entered into, and a new contract life would begin. Finally, the Fourth Circuit has made clear that worthlessness is an appropriate basis for an abandonment loss under Section 1(55. Helvering v. Gordon, 134 F.2d 685, 687 (4th Cir.1943) (“[I]n the case of personal property, such as securities, actual worthlessness is the test irrespective of retention of title since practical rather than technical considerations should prevail.”); see also Echols v. Commissioner, 935 F.2d 703, 707 (5th Cir.1991) (“As a general proposition, a taxpayer may claim a loss deduction under I.R.C. § 165(a) of the Code on either of two alternative grounds: abandonment or worthlessness.”). The termination of a contract rendered it worthless. For the foregoing reasons, the fact that Trigon attempted to enter into new contracts with terminated subscribers or providers does not foreclose deduction of a loss for the terminated contract under Section 165 and its implementing rule. Treas. Reg. § 1.165-2(a). That is true whether the loss is considered as a cancellation/termination or an abandonment. Second, the United States argues that, even if the claimed loss is appropriate in general, Trigon is not entitled to take the deduction until after the termination of all contracts owned as of January 1, 1987. The argument is this: (1) individual contracts cannot be reliably valued and there is no market for individual contracts; (2) contracts can only be reliably valued, and only are sold, as blocks; (3) therefore, the asset is the block; and (4) an abandonment loss is not permitted for part of an asset; i.e., the contracts terminated in the taxable years for which the loss is claimed. The point is perhaps well-taken, if the asset is defined as a block of contracts, but the Court previously has found that each subscriber and provider contract is a clearly identifiable and severable asset. See Section A.1, swpra. Hence, the argument is foreclosed for failure of its premise. C. The Absence Of A Secondary Market For Single Contracts Does Not Preclude Application Of The Fair Market Value Standard Yet another threshold contention in this case is that the absence of an active market in which individual subscriber and provider contracts are traded prevents those contracts from being valued under a fair market value standard. It is an undisputed fact that there are no known sales of single group health insurance contracts between insurance carriers either before January 1, 1987, or after. Davis Tr. (11/12/01) 190:24-191:5; Cothran Tr. (11/12/01) 256:4-10; Snead Tr. (11/19/01) 1416:25-1417-5; Byrd Tr. (11/16/01) 1157:11-22; Pugh Tr. (11/15/01) 1046:24-1048:8. Transactions involving large blocks of health insurance contracts have occurred. Davis Tr. (11/12/01) 191:6-9. An expert for the United States, Michael D. Pugh, testified that transactions in blocks of contracts generally occur with the sale of entire companies or when companies leave a market and sell all of their contracts in a given geographic region. Pugh Tr. (11/15/01) 1083:25-1084:13. But, the record is that, in large block transactions, neither party attempts to calculate a purchase price based on the purported value of individual contracts. Davis Tr. (11/12/01) 192:2-7; Cothran Tr. (11/12/01) 256:4-10; Snead Tr. (11/19/01) 1416:25-1417:8 and 1417:16-1418:6; Byrd Tr. (11/16/01) 1157:11-22; and Cellucci Tr. (11/19/01) 1184:3-17. Instead, the purchase price is based on the value of the entire block of contracts. Snead Tr. (11/19/01) 1418:17-1419:17; Byrd Tr. (11/16/01) 1158:8-1160:9. Trigon’s own valuation expert, Wierwille, testified that buyers of large blocks of health insurance contracts do not value individual contracts when determining a purchase price. Wier-wille Tr. (11/14/01) 628:9-20. After a transaction has closed, a purchaser occasionally will retain an appraiser to allocate the purchase price previously negotiated among the various assets that were acquired. Wierwille Tr. (11/14/01) 628:21-629:9. When considering blocks of contracts, potential purchasers evaluate the profitability of the contracts under their own management, not the seller’s management. Byrd Tr. (11/16/01) 1161:21-1162:5. Moreover, as even Trigon’s executives recognize, different insurers will have different experiences even with the same blocks of contracts. Davis Tr. (11/12/01) 195:10-13. Trigon has acquired at least two blocks of health insurance contracts for which it paid little or no consideration. Meyer Tr. (11/16/01) 1122:9-13. When the Life of Virginia company and a company referred to in the record as “MAMSI” wanted to leave the health insurance business, Trigon assumed their contracts at no cost. Meyer Tr. (11/16/01) 1122:14-1123-18. The United States asserts that the term “fair market value” by its express terms requires, as a predicate, that an asset can, in fact, be bought and sold in commercial transactions. In Transamerica Corp. v. United States, 15 Cl.Ct. 420, 474-75 (1988), the court held that: The term “fair market value” in the regulations does not apply to property in which the values cannot be identified with actual commercial market activity.... Where no one is willing to pay anything for property, its fair market value is zero. Similarly, in Griffin v. United States, 935 F.Supp. 1 (D.D.C.1995), the estate of former President Richard M. Nixon was seeking compensation for the taking of his presidential papers. Under the applicable statute, compensation was set in terms of fair market value. While the court found that the estate was entitled to compensation for many of the records, it found that the estate was not entitled to compensation for documents the President could not legally transfer because they had no fair market value. In this regard, the court held: The measure of any compensation due attaches as of the date of the taking. Here, the taking occurred on the day the [Presidential Recordings and Materials Preservation Act] became effective. At that time, the national security materials were classified and subject to executive orders which would not allow a President to transfer ownership of them to a member of the public without violating the law. In fact, plaintiffs, through their motion for partial summary judgment granting declaratory relief, concede that compensation should be measured pursuant to the fair market value at the time of the taking. .... Accordingly, pla