Court Opinion

ID: 9458344
Source: CourtListenerOpinion
Date Created: 2023-08-04 20:49:40.854596+00
Date Added: 2024-06-11T17:35:44.003375
License: Public Domain

GOLDBERG, Circuit Judge
(concurring specially):
Entertaining no sympathy with the taxpayer’s ploys to externalize a tax ex*266empt status where the internal mechanism reveals only a cosmetic deception, I am nonetheless disturbed by the transcendental rule that every error accepted and eseutcheoned by the Internal Revenue Service can later be transmuted into a mistake of law, thus making this taxpayer’s letter of exemption simply a piece of paper to be blown away by any subsequent shifting wind. Were I sailing in uncharted seas, I would be inclined to conclude that the Government’s admitted mistake in this ease was not a “mistake of law.” The Government held all of the facts in the taxpayer’s case at the time of the application for the Section 521 exemption. Subsequent to that 1963 application there were neither changes in those facts nor alterations in the applicable law. Nevertheless, the Government insists that its error in granting the taxpayer a Section 521 exemption constitutes a “mistake of law” within the confines of Automobile Club of Michigan v. Commissioner of Internal Revenue, 1957, 353 U.S. 180, 77 S.Ct. 707, 1 L.Ed.2d 746. Given some clear steering point and a strong tailwind, I would be inclined to hold that an error by the Commissioner in the application of a clear and unchanged regulation to clear and unchanged facts should be binding upon the Government for purposes of any attempted retroactive revocation where the Commissioner’s change of mind results wholly from a reassessment of the static facts under static law. The case law, however, is ambivalent, thus leaving me rudderless. E. g., compare Martin’s Auto Trimming, Inc. v. Riddell, 9 Cir. 1960, 283 F.2d 503; H.S. D. Co. v. Kavanagh, 6 Cir. 1951, 191 F. 2d 831, with Tollefsen v. Commissioner of Internal Revenue, 2 Cir. 1970, 431 F. 2d 511, cert. denied, 1971, 401 U.S. 908, 91 S.Ct. 867, 27 L.Ed.2d 806; Travis v. Commissioner of Internal Revenue, 6 Cir. 1969, 406 F.2d 987.
There is not a word to which I take exception in the majority opinion until I come to Section V, where I become perturbed when asked to subscribe to a thesis that the Government’s solemn word is a nothing. However, buttressed only by my own perturbance, I concur, albeit reluctantly, in the majority opinion.