Opinion ID: 75891
Heading Depth: 3
Heading Rank: 3

Heading: In Summary

Text: 42 Reading the clear and unambiguous wording of the statute, applying recognized rules of statutory interpretation, Coggin is entitled to know what the tax consequences of its restructuring will be with reasonable certainty at the outset. Indeed its own accountants advised Coggin prior to the transaction that LIFO inventory should not be recaptured since it did not inventory any goods under the LIFO method. See note 12 supra. 43 It is worrisome to think that a taxpayer may not know in advance whether this would be the day that the fictional aggregate theory or the fictional entity theory of partnerships will be applied on an ad hoc basis. 18 Relying upon the plain meaning of the statute, in a legitimate business transaction, a taxpayer deserves the right to be able to predict in advance what the tax consequences of such transaction will be with reasonable certainty. Here the statute just does not do what the litigation position of the Commissioner would have it to do. 44 Coggin was a holding company. It held stock in other C corporations. It was not engaged in the sale of automobiles. Under plain language of the statute, it had no LIFO inventory requiring recapture upon its election to become an S corporation. It is not necessary to resort to legislative history. Any potential windfall to holding companies must be cured by Congress, not the judiciary. See Gitlitz, 121 S.Ct. at 710.