Court Opinion

ID: 4476564
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:12:04.939457+00
Date Added: 2024-06-11T15:03:27.434485
License: Public Domain

Opper, J., dissenting: In the face of complicated and intricate measures designed by Congress to equalize the tax burden of married couples- in community and noncommunity property states, see H. Eept. No. 1274, 80th Cong., 2d Sess., p. 1; S. Eept. No. 1013, 80th Cong., 2d Sess., p. 1, we are arriving at a result which gives to community property taxpayers the benefit of a deduction unavailable to those residing in other sections of the country. As so often in the past, we are once more permitting formalistic terms of ancient property law to override the exigencies of a modern and uniform national tax system. E. g., Estate of James F. Waters, 3 T. C. 407; William Kirkman Gray, 5 T. C. 290, revd. (C. A. 5) 159 F. 2d 834; C. Clifford Minnick, 14 T. C. 8. Notwithstanding an absence of clear language in the statute, I cannot believe that it was the legislative intent to attain any such discriminatory result. In this respect I view the wording of the legislation and its history1 as less noncommital than does the present opinion. The disallowance is of “deductions * * * attributable to a trade or business carried on by” the taxpayer. And it is stipulated that “The ranch operations constituted a business carried on by the petitioner Fred MacMurray * * Not only does the statute deal with deductions, as to which the rule is uniform that such matters depend on legislative grace and are to be strictly construed, New Colonial Ice Co. v. Helvering, 292 U. S. 435, but its purpose seems to require disallowance as not a business expense of- the wife and as excessive with respect to the husband. See, e. g., Lucas v. Earl, 281 U. S. 111; Helvering v. Clifford, 309 U. S. 331; Harold G. Parker, 39 B. T. A. 423. Since I would not so distort the plain and manifest Congressional purpose as to grant these petitioners a deduction neither intended nor consistent with the basic objective of the statute, see Diamond A Cattle Co., 21 T. C. 1, I respectfully note my dissent.   See 90 Cong. Rec., Part 1, pp. 223^233. Senator Danaher of Connecticut, who was in charge of the legislation, referred in the Senate debate on the measure to cases in which deductions had been allowed: “In every single case which has gone to the courts * * * the Commissioner has lost simply for the reason that the Congress has never made it plain that its intention is to permit as legitimate deductions the cost of operating a business which has produced income.” He quoted with approval from the dissenting opinion of Member Lansdon. of the Board of Tax Appeals in George D. Widener, 8> B. T. A. 651, concluding with the following: “To permit these petitioners and others of their type to reduce their tax liability by the deductions of the costs of maintaining racing stables, expensive estates, and other similar activities, would result in a shifting of the burden of public taxation which it seems to me would be wholly inconsistent with the public interest. I am satisfied that these petitioners have not sustained the burden of proof necessary for us to find that the alleged losses were sustained during the taxable year in a business conducted for profit. I feel that the allowance of the deductions claimed would be contrary to the intent of Congress, detrimental to the public interest and a dangerous perversion of the sound and equitable principles upon which Just taxation must rest.”