Court Opinion

ID: 6891604
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:42:50.12776+00
Date Added: 2024-06-11T16:05:51.193554
License: Public Domain

EVANS, Circuit Judge
(dissenting).
Under Sec. 26(c) (1) it is settled that a credit in an income tax return may not be allowed where under the terms of the contract a dividend may have been legally distributed. In the instant case the taxpayer could have distributed a preferred stock dividend (or even a common stock dividend). It could have declared such a dividend out of its large accumulated surplus.1
The contractual restriction in the case before us, as I construe it, merely denied taxpayer the right to declare a cash dividend out of net earnings, in excess of half thereof.
A taxpayer seeking a tax credit has the burden of clearly bringing himself within its provisions.2
I find this court’s opinion in Northwestern Steel & Wire Co. v. Commissioner, 7 Cir., 147 F.2d 719, to be inescapable.

 Northwestern Steel & Wire Co. v. Commissioner, 7 Cir., 147 F.2d 719 ; Helvering v. Northwest Bancorporation, 8 Cir., 140 F.2d 958; Commissioner v. Columbia River P. M., 9 Cir., 127 F.2d 558; Kaufmann Department Stores v. Commissioner, 3 Cir., 144 F.2d 776; United States v. Dakota Tractor Co.; 8 Cir., 125 F.2d 20, certiorari denied, 316 U.S. 671, 62 S. Ct. 1042, 86 L.Ed. 1746; Valentine-Clark Corp. v. Commissioner, 8 Cir., 137 F.2d 481; Commissioner v. Oswego Falls Corp., 2 Cir., 137 F.2d 173.

 Helvering v. Northwest Steel Mills, 311 U.S. 46, 61 S.Ct. 109, 85 L.Ed. 29; Helvering v. Ohio Leather Co., 317 U.S. 102, 63 S.Ct. 103, 87 L.Ed. 113; Rahr Malting Co. v. United States, 7 Cir., 145 F.2d 867; Commissioner v. Meridian & Thirteenth R. Co., 7 Cir., 132 F.2d 182.