Court Opinion

ID: 9444954
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:16:42.221435+00
Date Added: 2024-06-11T17:30:04.664304
License: Public Domain

SHACKELFORD MILLER, Circuit Judge
(dissenting).
I am of the opinion that the present case involves merely a question of the correct computation of the tax for the year 1944 under Rule 50 of the Tax Court, using undisputed figures as shown by the taxpayer’s return, and applying the rulings of the Tax Court with respect thereto and the applicable statutory provisions. It does not involve a reopening of the case or a rehearing of any issue previously before the Tax Court. Accordingly, Rule 19 of the Tax Court limiting the time for filing a motion for rehearing is not involved.
The Commissioner’s computation is based upon a net income of $28,366.79. If that base is correct and he is permitted to decrease the credit for adjusted excess-profits net income taken by the taxpayer under Sec. 26(e), Internal Revenue Code, 26 U.S.C.A. § 26(e), to what it properly should be under Sec. 710, Internal Revenue Code, 26 U.S.C.A. § 710, by reason of the Tax Court’s ruling which decreased excess profits tax deficiencies the computation adjudged by the Tax Court is incorrect.
The decrease in the credit is in accordance with the statutory provisions and is mandatory in computing the tax, unless barred for failure to timely raise the point. The Commissioner’s amended answer and subsequent motions to the same effect were within time, under Sec. 272 (e), Internal Revenue Code, 1939, 26 U.S. C.A. § 272(e). Helvering v. Edison Securities Corp., 4 Cir., 78 F.2d 85, 89-91; Commissioner of Internal Revenue v. Ray, 7 Cir., 88 F.2d 891, 893; Olds & Whipple v. United States, 22 F.Supp. 809, 817, 86 Ct.Cl. 705; Commissioner of Internal Revenue v. Wells, 6 Cir., 132 F.2d 405, 408.
I am of the opinion that the base figure used by the Commissioner is correct as shown by the record, and does not require a rehearing of any issues previously determined by the Tax Court or a determination of any new issues by it. The taxpayer’s tax return for 1944 gives his net income as $19,295.96. The Commissioner was successful before the Tax Court in having two deductions disallowed, namely, capital stock tax $2,070.83, and one-third of a $15,000 legal fee, namely, $5,000. He was also successful in adding additional income from rentals in the amount of $3,000, and conceded an additional deduction of $1,000 for officer’s compensation. The net result of these adjustments, following the rulings of the Tax Court, was an increase in net income in the amount of $9,070.83. This amount, when added to the net income shown by the taxpayer’s return, results in a net income of $28,366.79, the base used by the Commissioner in his proposed computation. I am of the opinion that the Tax Court was in error in declining to use this base in its computation under Rule 50 of the correct tax for 1944, and that the judgment should be reversed.