Legal Document

482 U.S. 117 107 S.Ct. 2275 96 L.Ed.2d 97 COMMISSIONER OF INTERNAL REVENUEv.ASPHALT PRODUCTS CO., INC. ASPHALT v. REVENUE. Nos. 86-1053, 86-1054. June 1, 1987. PER CURIAM. 1 Asphalt Products Co. (APC) manufactures emulsified asphalt, a paving material containing oil refining residues, principally for sale to Tennessee county governments use in highway construction. For reasons related the rise prices attending 1973 Arab embargo, APC's 1974 year-end inventories and accounts receivable were substantially higher than prior years. Because APC kept its books, prepared federal tax return, on cash receipts disbursements basis, reported taxable income did not fully reflect these changes. return also claimed deduction of $1,103.04 expense transporting two trucks from their place purchase Seattle Tennessee. The driven by way California, where they picked up trailer-mounted waste water treatment plants bought shareholders individual capacities. 2 Commissioner Internal Revenue determined that, because increases receivable, company's traditional cash-basis bookkeeping "clearly income," 26 U.S.C. § 446(b), year, was therefore required compute an accrual basis. disallowed trailers, ground that it personal shareholders. After several other adjustments, recomputed taxes show deficiency $154,332.16. 3 further contended wrong accounting method truck transportation expenses constituted negligence, added penalty under 6653(a)(1), which then provided: "If any part underpayment . is due negligence or intentional disregard rules regulations (but without intent defraud), there shall be amount equal 5% underpayment." (Section 6653 amended minor respects Tax Reform Act 1986, Pub.L. 99-514, 1503, 100 Stat. 2742; unless otherwise indicated, all references are pre-1986 statute.) totaled $7,716.61—5 percent full alleged 4 In Court, stipulated properly deductible, unsuccessfully contested requirement accounting, successfully certain determinations, resulting recalculated $133,248.69—almost change methods. Court concluded nonnegligent, but affirmed Commissioner's finding had negligently deducted expenses. It thus $6,943.37, computed as before reference (adjusted carryback credits, see §§ 6211, 6653(c)(1)). 5 Appeals Sixth Circuit affirmed, over dissent, Court's determination unanimously (albeit with little enthusiasm) negligent. 796 F.2d 843 (1986). has petitioned certiorari those issues No. 86-1054, we deny petition. Accordingly, purposes this opinion accept, approving, negligence. reversed imposition deficiency, concluding "should applied only portion attributable deduction." Id., at 850. issue 86-1053. holding apparent conflict Abrams United States, 449 662 (CA2 1971), obvious plain language statute, grant 86-1053 reverse. 6 Section 6653(a)(1) could clearer. If "any underpayment" add "5 impossible explain statute merely repeating language—the imposed "the underpayment," "part [the] By contrast (if thought necessary), very next paragraph 6653(a)(2) (added 1981, 97-34, 722(b)(1), 95 342), limits 50% interest negligent underpayments [taxpayer's] negligence." section imposing penalties fraudulent contains same proviso, 6653(b)(2)(A), does (after 1986 Act) provision direct underpayments. See 1503(b)(1)(A), 2742 ("If fraud, 75 fraud"). As Second held States: "It evident intended five assessed just against segment entire amount. clear leads no interpretation." F.2d, 664. 7 taxpayers argued "that literal application lead absurd results comparatively insignificant item omitted," ibid., court expressly reserved judgment situation. Ibid. ("That case us appeal express whatever proper disposition if should ever arise"). litigation relied reservation, absence "egregious attempts [by APC] avoid payment taxes," 849, distinguish Abrams, construction lets tail wag dog." 850; ibid. (Nelson, J., concurring dissenting part) ("Where taxpayer subject omission income, asserts large I agree would let calculate applying statutory percentage sum non-negligent underpayments"). This error. Judicial perception particular result unreasonable may enter into ambiguous provisions, cannot justify what Congress plainly intentionally provided. Given Government's plausible deterring preparation given statute's explicit limitation underpayment, conclusion can drawn here except desired impose modest (5%) upon taxpayer. our assigned role alter disposition. 8 decision limiting 9 Reversed. 10 Justice MARSHALL, part. 11 Once again decides summarily benefit briefing merits question decided. noted recently, Montana Hall, 481 400, 405-406, 1825, ----, 1825 (1987) (dissenting summary disposition), Rules governing filing petitions instruct parties address whether plenary consideration appropriate, do encourage detailed discussions merits. case, adhering admonition Supreme Rule 22.2 response "as short possible," respondent filed nine-page brief opposition petition certiorari, four pages dealt 6653(a)(1). is, my view, unfair decide such first permitting litigants 12 wisdom particularly doubtful. legislative history mentioned indicates considered carefully scheme penalties, H.R.Conf.Rep. 99-841, pt. 2, pp. 779-782 (1986), disapproved case. 782, n. 3. definitively stated below followed cases arising Act, left undisturbed, have negligible precedential value. Moreover, courts considering even regard years 1987, while bound current Congress' view previous Congress, probably pay some heed congressional reading 6653(a)(1).* 13 Under circumstances appears reason reversing simply majority perceives wrong. But routinely denies seeking review decisions face responses, appear discern intelligible principle distinguishing number chooses giving opportunity full, itself ensure initial impression borne out more thoughtful consideration. That jurisdiction discretionary arbitrary exercise. 14 file briefs dissent too concur per curiam opinion. 15 BLACKMUN, 16 denial reversal issue. correct so clearly error warranted. hope action innate reluctance all, States Courts reached conflicting conclusions issue, law often special vagaries. give * Indeed, petitioner relies support his contention erroneous, Pet. Cert. 6-8, suggests vacate remand light Conference Report. 8, 4.

Classification Label: 11