Court Opinion

ID: 4481737
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:03.976859+00
Date Added: 2024-06-11T15:03:37.029661
License: Public Domain

Quealy, concurring: I basically agree with the views expressed in the concurring opinion of Judge Simpson regarding the prospective applicability of section 1311 to the circumstances of this case. However, in making this prospective application of section 1311,1 do not believe that it is necessary to refer to the legislative history of sections 1311 through 1315 or to any contemporaneous articles written by the supposed authors of those sections. Where a statute is clear and unambiguous on its face, and the meaning can be gathered from its words and context, it is not the position of a court to seek in the first instance the legislative intent elsewhere. Burnet v. Guggenheim, 288 U.S. 280 (1933); Hatfried, Inc. v. Commissioner, 162 F. 2d 628 (C.A. 3, 1947); Riverdale Co-op. Creamery Ass'n v. Commissioner, 48 F. 2d 711 (C.A. 9, 1931); and Alexander C. Yarnall, 9. T.C. 616 (1947), affirmed per curiam 170 F. 2d 272 (C.A. 3, 1948). The facts of this case bring it squarely within the language of sections 1311 and 1312(3) (A). Section 1311(a) provides in pertinent part that: If a determination * * * is described in one or more of the paragraphs of section 1312 and, on the date of the determination, correction of the effect of the error referred to in the applicable paragraph of section 1312 is prevented by the operation of any law or rule of law, * * * then the effect of the error shall he corrected by an adjustment made in the amount and in the manner specified in section 1314. In this case, the determination is described by section 1312(3) (A) in that the decision of the U.S. District Court with respect to the year 1958 required “the exclusion from gross income of an item * * * with respect to which tax was paid and which was erroneously * * * omitted from the gross income of the taxpayer for another taxable year.” Under section 1311(b) (1) (B), the position maintained by the taxpayer and adopted in the determination must be inconsistent, in this case at least, with, the erroneous exclusion of income from “another taxable year.” In this case, the District Court in its determination did adopt a position maintained by the taxpayer, and this position was inconsistent with the taxpayer’s erroneous exclusion of the item from his income for “another taxable year” which, in this case, is a year subsequent to 1958. Of particular significance in the statutory framework is the use in section 1312(3) (A) of the phrase “another taxable year” as opposed to “a prior taxable year.” In this case, there was a refund suit where the determination with respect to the year involved in the refund suit (1958) would necessarily become final in a subsequent year, where pending that determination the same item was omitted from the return of the taxpayer for a year subsequent to the year involved in the suit, and where the statute of limitations prevents the assessment of a deficiency for that subsequent year. Thus, the subsequent year is “another taxable year,” and the language of section 1312(3) (A) clearly embraces the circumstances of this case. It is therefore unnecessary to look to sources outside that language to justify the prospective application of section 1311 where the other requirements of that section are met as they are in this case. Furthermore, section 1314(a) (2) requires that after fixing the tax liability, as previously determined for the year that the item should have been included, there shall be ascertained “the increase * * * in tax previously determined which results solely from the correct treatment of the item which was the subject of the error.” The “item” in dispute in this case is limited to the gain that was in issue in the 1958 litigation. We have held in this case that 19'59 was the proper year for the inclusion of the “item” in dispute. If 1959 was not the proper year, the Commissioner’s determination in the notice of deficiency for that year cannot be sustained as the correct treatment of the item will not have been ascertained.