Opinion ID: 584330
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: 10 The relevant facts of this case are not in dispute. The plaintiffs, Michael J. Mostowy and Josephine Mostowy, entered into a contract in 1985 whereby they received payments in return for allowing a third party to mine coal on their property. In 1985, plaintiffs were able to exclude sixty percent of these payments as capital gain income under 26 U.S.C. § 1202 (1982). The next year, in 1986, Congress passed the Tax Reform Act of 1986, Pub.L. No. 99-514, 100 Stat. 2085 (1986), which repealed section 1202 of the Internal Revenue Code by way of section 301(a) of the Tax Reform Act of 1986, Pub.L. No. 99-514, 100 Stat. 2216 (1986). In 1988, the Mostowys received another payment from coal mining based on the 1985 contract. That same year, plaintiffs paid income tax in the amount of $94,929. In 1989, plaintiffs filed an amended tax return for 1988 seeking a refund of $60,309, plus interest. The refund was claimed based on the capital gains deduction plaintiffs sought for the 1988 payments they received under the 1985 contract. On September 13, 1990, the Internal Revenue Service disallowed the Mostowys' claim. 11 On November 14, 1990, plaintiffs filed a complaint with this Court claiming that the disallowance of their capital gains deduction violated the Due Process and the Equal Protection clauses of the Fifth Amendment to the United States Constitution and the Omnibus Taxpayer Bill of Rights, Technical and Miscellaneous Revenue Act, Pub.L. No. 100-647, §§ 6226-6247, 102 Stat. 3342, 3730-3752 (1988). Defendant filed a motion for judgment on the pleadings asserting that the complaint did not state a claim upon which relief may be granted.