Court Opinion

ID: 4482743
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:40.302386+00
Date Added: 2024-06-11T14:53:35.965044
License: Public Domain

Dawson, J., concurring: As the author of this Court’s Danielson opinion, I agree with the approach taken and the result reached in the majority opinion written by Judge Quealy here. I think the Court of Appeals for the Third Circuit, in its wisdom, would not invoke its so-called Danielson rule in these particular circumstances where both parties to the agreements are before the Court. The practical, and I believe correct, solution is to let the substance of the transaction prevail over the form of the agreements. That is exactly what the majority opinion does. In addition, I have the following comments. Respondent took inconsistent and alternative positions in the notices of deficiencies sent to the respective petitioners so that the revenue would be adequately protected. It is understandable that he did not want to be whipsawed by the respective petitioners since they are in opposite positions for Federal income tax purposes. Respondent is simply seeking consistent tax treatment in accordance with the facts and circumstances surrounding the transaction. Neither the consolidation of the two cases nor respondent’s request for consistent tax treatment of the respective petitioners has any effect on burden of proof. In each case I think the burden of proof remains on the respective petitioners to show to the satisfaction of the Court that the respondent’s determination is erroneous. Clearly the inconsistent positions taken by the respondent were not without a rational factual or legal basis. See Leon R. Meyer, 46 T.C. 65, 82-83 (1966), affirmed on this issue 383 F. 2d 883 (C.A. 8, 1967); Estate of Goodall v. Commissioner, 391 F. 2d 775, 781-784 (C.A. 8, 1968), certiorari denied 393 U.S. 829 (1968); Brantley L. Watkins, 53 T.C. 349, 358-359 (1969); M. Lucille Harrison, 59 T.C. 578, 592 fn. 13 (1973); J. Leonard Schmitz, 51 T.C. 306, 313 (1968). In his well-reasoned opinion in the Goodall case Judge (now Justice) Blackmun said (391 F. 2d at 782-783): 4. These are, after all, tax cases. Substantial sums are involved. The Commissioner is charged with the protection of the revenues. While these factors might be viewed as pragmatic, it would be unseemly, we feel, to force the Commissioner, in the performance of his administrative duties, to make an awesome choice of this kind at his peril. Taxes are not a game. Of course, the Commissioner, and the government itself, in this court is no more and no less than just another litigant. But we are aware of every person’s tax responsibilities and we are not inclined to let the realization of revenues stand or fall on so technical a base as impeccable consistency. Consistency is desirable but its virtue has limits. Good faith inconsistency buttressed by acceptable argument, when considered in the framework of the Commissioner’s responsibilities, cannot be regarded as an offense which provides a bar to bona fide tax litigation. 5. Inconsistency in determinations, when they are not made in bad faith, does not equate with an absence of the statutorily required determination, as the taxpayers suggest. Each taxpayer, even though there are several related ones, by the determination and notice made for him, knows the position the Commissioner is taking with respect to his tax situation. So long as the ultimate resolution of the issues is consistent for all, we see no legal wrong. Forrester, Fay, Simpson, Featherston, Irwin, and Sterrett, JJ., agree with this concurring opinion.