Court Opinion

ID: 4474398
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:10:55.066369+00
Date Added: 2024-06-11T14:53:52.185668
License: Public Domain

Johnson, J, dissenting: I am unable to agree with the majority’s disposition of the second issue. After this Court had decided (11 T. C. 447) that petitioner received in 1941 over 75 per cent of five compensations for services rendered over a period of sixty months or more under five contracts, the Commissioner computed a 1941 tax by including in income the compensations on all five contracts. He then computed the additional amounts of tax which petitioner would have paid if these five compensation payments had been ratably spread over the years of performance. As the normally computed tax was not greater than the aggregate increases in tax which would have resulted if the compensations had been spread, he proposed the normally computed figure, or $214,088.27, as the proper amount of tax con-formant with section 107. Accepting the $214,088.27 as the proper tax normally computed, petitioner computed the additional amounts of tax which he would have paid if only one of the five compensation payments had been ratably spread over the years of performance. The additional amount was $124,727.84, or less than the normally computed tax on income comprising all fi/oe compensations. Invoking section 107, he would use this lesser figure as his total tax liability for 1941, and the majority agrees. In my opinion there is no warrant whatever in the section for comparing the normally computed tax on five compensations with the aggregate tax on one compensation ratably spread. Section 107 provides that “the tax attributable to any part” of compensation for services rendered over sixty months “shall not be greater than the aggregate of the taxes attributable to such part” had it been ratably included in income over the years of performance. The whole tax for 1941, or $214,088.27, is not “the tax attributable to” compensation on one contract. It is attributable to compensation on five, and to any other income which petitioner received in 1941. It is not, therefore, proper to compare the $124,727.84 with $214,088.27, but only with such fraction of the latter figure as represents the part of normally computed tax “attributable to” the one compensation. As no significance has been given to the quoted words of the section in the proposed computations under Eule 50, they form no correct basis for an entry of judgment.