(plaintiff, a partnership, paid $5.1 million for turnkey oil and gas well drilling venture; site preparation occurred during 1999 (tax year in issue), but no drilling occurred within 90 days after end of 1999; plaintiff deducted full $5.1 million in 1999 as intangible drilling costs, but amount denied because economic performance requirement of I.R.C. Sec. 461(h) not satisfied; IRS position affirmed – commencement of drilling occurs upon actual penetration of ground for well drilling purposes; 3.5 month rule of Treas. Reg. Sec. 1.461-4(d)(6(ii) does not allow plaintiff to treat any of service due under contract as having been economically performed in 1999 – all services required must be rendered within 3.5 months of payment; in any event, deductions allowed under 3.5 month rule limited to cash payments (or equivalents) but not payments by notes).