Source: https://law.justia.com/cases/federal/appellate-courts/F2/211/612/186785/
Timestamp: 2020-03-29 09:59:16
Document Index: 71546902

Matched Legal Cases: ['§ 711', '§ 722', '§ 711', '§ 722', '§ 711', '§ 732', '§ 722', '§ 711', '§ 721', '§ 722', '§ 711', '§ 711']

Packer Pub. Co. v. Commissioner of Internal Revenue, 211 F.2d 612 (8th Cir. 1954) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Eighth Circuit › 1954 › Packer Pub. Co. v. Commissioner of Internal Revenue
Packer Pub. Co. v. Commissioner of Internal Revenue, 211 F.2d 612 (8th Cir. 1954)
U.S. Court of Appeals for the Eighth Circuit - 211 F.2d 612 (8th Cir. 1954) April 15, 1954
"(b) Taxpayers using average earnings method. The tax computed under this subchapter (without the benefit of this section) shall be considered to be excessive and discriminatory in the case of a taxpayer entitled to use the excess profits credit based on income pursuant to section 713, if its average base period net income is an inadequate standard of normal earnings because —
Section 711(b) (1) (J), 26 U.S.C.A. § 711, under which relief was granted administratively by stipulation and later withdrawn by the Commissioner after the Tax Court had granted relief under § 722, is as follows:
"(J) Abnormal deductions. Under regulations prescribed by the Commissioner, with the approval of the Secretary, for the determination, for the purposes of this subparagraph, of the classification of deductions —
"(ii) If the class of deductions was normal for the taxpayer, but the deductions of such class were in excess of 125 per centum of the average amount of deductions of such class for the four previous taxable years, they shall be disallowed in an amount equal to such excess." 26 U.S.C.A. § 711(b) (1) (J).
It is obvious, from the above quoted portions of § 722 and § 711 that the application of the formulae for determining normal or base period income is a complicated process. Reference to the remainder of both sections not quoted herein makes that fact more certain. It is safe to say from the proceedings in Congress incident to the enactment of § 732(c) and the language of the latter section, heretofore quoted, that the congressional intent and purpose was to provide that the application of the formulae set out in § 722 and § 711 (and § 721, not now directly involved) should be finally reviewed by the experts in that field, — the Tax Court. The Commissioner contends that such finality of review by the Tax Court extends not only to the ascertainment of whether the facts in a particular case warrant relief under those sections, but also to the legal construction of those sections for the purpose of determining whether relief granted under § 722 automatically precludes and is in lieu of any and all relief which is provided for by § 711. The cases of Colonial Amusement Co. v. Commissioner, 3 Cir., 173 F.2d 568; Colorado Milling & Elevator Co. v. Commissioner, 10 Cir., 205 F.2d 551; George Kemp Real Estate Co. v. Commissioner, 2 Cir., 182 F.2d 847; James F. Waters, Inc., v. Commissioner, 9 Cir., 160 F.2d 596, are cited in support of that position.
Since the pertinent portions of § 711 will be referred to later, they are not set out here