Court Opinion

ID: 8883993
Source: CourtListenerOpinion
Date Created: 2022-11-26 21:21:30.710256+00
Date Added: 2024-06-11T17:06:49.084279
License: Public Domain

McCREE, Circuit Judge
(concurring).
I concur in the result reached by the court. My only difficulty with the opinion of the majority is its holding that we are bound by the “clearly erroneous” standard of review of Commissioner of Internal Revenue v. Duberstein, 363 U.S. 278, 80 S.Ct. 1190, 4 L.Ed.2d 1218 (1960). I believe that this is a case like Austin Village, Inc. v. United States, 432 F.2d 741 (6th Cir. 1970), rev’g 296 F.Supp. 382 (N.D.Ohio 1968), and Union Planters National Bank v. United States, 426 F.2d 115, 117 (6th Cir. 1970), where the objective indicia of the transaction are determinative of its legal consequences. Taxpayers here might have entertained a subjective belief (however unreasonable) that the corporations were lending money to the trust, but the facts recited in Judge Edwards’ opinion make it clear that the economic reality of these transactions bore no relation to a bona fide loan. As this court said in Berthold v. Commissioner of Internal Revenue, 404 F.2d 119, 122: “Such subjective testimony, however, can be technically true and still not controlling on the finder of facts in this case. * * * The intention of the parties relates not so much to what the transaction is called, or even what form it takes, as it does to an actual intent that money advanced will be repaid. [Citation omitted.] Normal security, interest and repayment arrangements (or efforts to secure same) are important proofs of such intent. And here such proofs are notably lacking.”
Thus the court in both Berthold and this case is examining the objective manifestations of the transactions in question. The existence vel non of such indicia is of course a question of fact. But the determination of the legal effect of the existence of these indicia is, in my view, a question of law, and we should not limit our review of a District Court’s determination of such questions by the Duberstein standard.