Court Opinion

ID: 6886020
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:28:32.033626+00
Date Added: 2024-06-11T16:05:42.955021
License: Public Domain

L. HAND, Circuit Judge
(dissenting).
Although, when spouses file a joint return, the statute requires the tax to be “computed on the aggregate income,” my brothers believe that neither taxpayer is liable for the tax so returned. They believe that each spouse is only liable for another tax which not only appears no*784where upon the return, but cannot even be calculated from it, for it does not separate the two incomes fused. It follows that the Commissioner cannot use the tax returned either to distrain or to sue; unless the spouses consent to pay, he must undertake an independent inquiry from sources not disclosed in the return; he must ascertain their separate incomes and “compute” a tax upon each. What he is to do then my brothers do not say, but I assume that he must divide the tax returned into parts proportional to the taxes separately estimated. There is not a syllable in the statute to justify any such proceeding; on the contrary it contradicts the basic assumption throughout the act that the taxpayer is liable for the tax returned. The only exception, so far as I know, is in the case of affiliated corporations, for which Congress provided by § 24(b) of the Revenue Act of 1926 that, if the affiliates did not agree upon the division of the tax, the Commissioner should divide it “on the basis of the net income properly assignable to each.” From this it seems to me — following the conventional canon — that where Congress meant to distinguish between a taxpayer’s liability and the tax returned, it supposed that it was necessary to 'say so.
Nor can I see any just call for such a solecism. A joint return is a privilege; the spouses seek to minimize their liability, an altogether innocent desire it is true, but one to which Congress may fairly attach joint liability. The only conceivable grievance they could have, would be that they had had some assurance that they would not be so held. From 1923 until at least the decision by a divided court in Cole v. Commissioner, 9 Cir., 81 F.2d 485, whatever authority there was appeared to be for joint liability. The only other decision which could possibly have misled them was Crowe v. Commissioner, 7 Cir., 86 F.2d 796 in which the court need only have decided that the husband’s fraud did not toll the statute of limitations against the wife; although it did take broader ground. Moreover, there would be two answers to any such argument, so far as the state of the decisions gave it support; first, there is no evidence that in the case at bar the wife relied upon them; second, it would have made no difference, if she had. Administrative practice may go far to control the meaning of a statute, but we all have to take our chances on what the courts will in the end decide, and we cannot es-top the Treasury if they change their minds.
Had it not been for Helvering v. Janney, 311 U.S. 189, 61 S.Ct. 241, 85 L.Ed. 118, 113 A.L.R. 980 and Taft v. Helvering, 311 U.S. 195, 61 S.Ct. 244, 85 L.Ed. 122 I might have felt concluded by our decision in Commissioner v. Rabenold, 2 Cir., 108 F.2d 639, little as it would have persuaded me; but it seems to me that the reasoning in those cases at least sets me free from the authority of what after all was only a majority opinion. I think that the later rulings of the Tax Court are right and that the present order should be reversed.