Court Opinion

ID: 8590470
Source: CourtListenerOpinion
Date Created: 2022-11-23 15:47:21.362029+00
Date Added: 2024-06-11T16:54:25.742135
License: Public Domain

Madden, Judge,
dissenting.
I think the plaintiff is not entitled to recover. The Birmingham, Clarion Oil Company and Aramo-Stiftung cases, cited in the court’s opinion, involved the penalty tax on undistributed profits. To penalize a corporation for not distributing as dividends money which it either does not have, because it pays it out in back taxes during the year, or which prudence would require it to keep, because it will be needed to pay taxes accrued during the year though not payable until the following year, would seem to amount to penalizing sound management. The instant situation presents no comparable pressure of equity against the text of the statutes. The carry-back provision of the statutes does not permit the taxpayer to average its profit and loss experience for a five-year period. It only permits net operating losses, as determined by statutory provisions, to be carried back. To get the advantage of the statute, its requirements should be met. The Tax Court, in Lewyt Corporations. Commissioner, 18 T. C. 1245, No. 151, has decided the same question which is involved in our case, adversely to the plaintiff’s contentions. I agree with its decision.
Chief Judge Jones agrees with this dissenting opinion.