Court Opinion

ID: 4497979
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:15:42.476589+00
Date Added: 2024-06-11T08:48:36.253373
License: Public Domain

Black,
dissenting: I dissent from the majority opinion because I do not think the facts in the instant case show that the stockholders of the Bleser Investment Corporation elected to return the net income of the corporation on their own individual income tax returns and thus comply with section 104 (d) of the Revenue Act of 1932 and thereby relieve the corporation from the imposition of the 50 percent surtax imposed by section 104 (a).
There were three stockholders of the corporation, Daniel C. Bleser, his wife, and his son-in-law. The latter two shareholders only owned five shares each. The facts do not show that they made any attempt whatever to comply with section 104 (d). Whether it be assumed that the small amount of shares which each of these two owned were qualifying shares and were in reality beneficially owned by decedent, or whether it be assumed that the wife and son-in-law, in their own right, did own five shares each of the corporation’s stock but that their interest may be disregarded under the maxim, de minimis non curat lew, I still don’t think the facts show an attempt at compliance with section 104 (d). In Zaida Clay, 40 B. T. A. 562, cited in the majority opinion in support of the conclusion reached, there was a conceded intent to comply with this particular section of the statute and we properly held that the deficiency was chargeable to the taxpayer in that case. Here we have no such clear intent to comply with section 104 (d), but on the contrary the facts which are in evidence when viewed as a whole seem to me to negative any such intention. Therefore, in my judgment, if there is a deficiency because of the application of the 50 percent surtax to the corporation’s income under section 104 (a), it exists against the corporation and not against the petitioners.
Also, it seems to me that there are no facts which would estop petitioners from making the defense which is now sought to be made. The Commissioner had the income tax returns of both the corporation arid the decedent before him and he was bound to have seen that decedent returned only $44,501.84 as income received from the corporation, whereas, the findings of fact show that “The adjusted net income of *652the corporation for its fiscal year ended June 30, 1934, as originally reported, was in excess of $200,000, and decedent’s entire pro rata share of such adjusted net income would have amounted to a sum in excess of $195,000.”
Under such circumstances, I am unable to see where there is anything kin to estoppel in this case. Cf. Salvage v. Helvering, 297 U. S. 106.
Aéundbll, Mxjbdook, Leech, and Tyson agree with this dissent.