Court Opinion

ID: 3725457
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:55:10.539509+00
Date Added: 2024-06-11T18:01:31.823155
License: Public Domain

With all due respect to the majority in this case, I must dissent on Assignment of Error No. II.
In Driskill v. Cincinnati (1940), 66 Ohio App. 372, 20 O.O. 245, 34 N.E.2d 241, the court set forth two criteria which must be present in order for a justiciable issue to exist: (1) the plaintiff must have a right or a duty owing by the defendant; and (2) the denial of the plaintiff's right or duty by the defendant must be a present event rather than a hypothetical future event. See, also, Bilyeu v. Motorists Mut. Ins. Co.
(1973), 36 Ohio St.2d 35, 37, 65 O.O.2d 179, 180,303 N.E.2d 871, 873 (quoting Aetna Life Ins. Co. v. Haworth [1937],300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617) ("[In] order to grant declaratory relief, the court must be convinced of the existence of `* * * a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical set of facts.'")
As I see it, the underlying justiciable issue here is not so much whether the Ohio Company breached its duty to appellants by not transferring all the pension funds by December 31, 1992 but whether the Internal Revenue Service would invoke its punitive powers under the facts in this case.
On December 3, 1992, the Halleys, as cotrustees, terminated their pension plan by authorizing the National City Bank (of Cleveland, Ohio) to instruct the Ohio Company to distribute the pension plan assets on or before December 31, 1992 to an Individual Retirement Account ("IRA") with National City Bank.
The Ohio Company transferred all of the funds in the name of Halleys' plan (approximately $1 million) by December 31, 1992. However, upon learning in March that the appellants also listed $27,000 in street name, the Ohio Company promptly transferred this balance to the Halleys' IRA (with National City Bank) on March 3, 1993.
There is no claim here that the Ohio Company purposely or intentionally withheld the $27,000 listed in street name.
I do not challenge the statement that the IRS provided letter rulings (to others) that the date of distribution is the date the transfer agent receives instructions to make the distribution and that, if the private rulings are followed, the entire balance of the pension was distributed in 1992, and it qualified as a total distribution to appellants and they would not be liable for tax on the 1992 distribution.
I concede that private letter rulings cannot be used as precedent and only apply to the taxpayer requesting the ruling. See Section 6110(j)(3), Title 26, U.S.Code. *Page 528 
Since this action depends on what the IRS would decide, it seems to me that the IRS should have been made a party to the action.
Nonetheless, I would set aside all this rigmarole and simply have the taxpayer request (1) a letter ruling (2) before the statute of limitations expires.
If the IRS seeks out only intentional and flagrant violations, which (in my judgment) this case is not, then the question of damages or threat of prosecution would disappear. If the ruling reflects a policy that damages are invoked whether violations are intentional or not, then the damages are ascertainable and the gap in petitioners' claim is filled.
I would overrule Assignment of Error No. II.