Court Opinion

ID: 9451369
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:15:55.131985+00
Date Added: 2024-06-11T17:32:41.878404
License: Public Domain

JOHNSEN, Circuit Judge
(dissenting).
I believe that Judge Becker was right in his decision, 231 F.Supp. 404, and I would affirm the judgment.
It seems to me that within legal realities the City of Bismarck letter necessarily constituted more than a mere private-letter ruling. It was not a communication made to some taxpayer as a ruling on his personal situation. It was an expression engaged in generally to the officials of a city as to the tax situation which would be occasioned to all those under a municipal improvement project, of commercial relationship, for meeting the city’s downtown parking problem. Thus it was a ruling which from its nature and its scope obviously would be a matter of general municipal interest, public communication, class significance and unindividualized taxpayer application. In the case of the immediate project, the record shows that, up to the time of its non-retroactive revocation, the ruling had operated for the benefit of 500 taxpayers as a class and not on an individual-situation basis.
It further seems to me that, in the similar attempts which were then being made by municipalities throughout the country to deal with their parking problem, the ruling reasonably could be expected to be so publicized — which here occurred by the reporting of it in Commerce Clearing House Tax Service and other regular tax services — as to come to be given natural application to other such identical projects. Certainly the Commissioner could not, upon request, have refused to accord the same tax-deduction right to those under an identical project, while he permitted his Bismarck ruling to remain in effect. “The Commissioner cannot tax one and not tax another without some rational basis for the difference.” United States v. Kaiser, 363 U.S. 299, 308, 80 S.Ct. 1204, 1210, 4 *86L.Ed.2d 1233 (1960) [concurring opinion of Mr. Justice Frankfurter]. He must accord the same tax treatment to all those of an identical class, i. e., those who are without some rational basis of difference in their situation. And this requirement of equality of treatment has application to the exercise of the Commissioner’s power as to retroactivity under 26 U.S.C.A. (I.R.C.1954) § 7805(b) in relation to such rulings or regulations as may be engaged in by him. International Business Machines Corp. v. United States, 343 F.2d 914, 920 (Ct.Cl.1965) [cert. den. 86 S.Ct. 647] and cases cited. “For all tax rulings, it is important that there be like treatment to those who should be dealt with on the same basis.” Id., 343 F.2d at p. 923.
As indicated, it seems to me that the Bismarck ruling was of such administrative character, operational scope and general-class application as not in Commissioner practice to have the status of conventional, private-letter or “individualized taxpayer’s rulings”.1 On these realities, the fact that the ruling was not published in the Internal Revenue Bulletin would not, I think, be controlling of its legal aspect and significance. (See Judge Becker’s opinion, 231 F.Supp. at 412, and the footnote quotation contained therein from Dean Griswold’s article in 54 Harvard L.Rev. 398, 417-419.) And if the ruling thus was one of general legal scope, so that the taxpayer here was entitled as a matter of law to claim the benefit thereof on the basis of identical project and deduction situation, then I can see no possible question as to his right to recover. He had, within the time allowed by statute, filed an amended return, made deduction of the project assessments paid by him, and filed claim for refund, so that he has met all the requirements for maintaining a suit under § 7422 to get back taxes erroneously or excessively paid.
But even if the Bismarck letter were to be regarded'' as a mere private-letter ruling, I think the taxpayer here would still be entitled to recover in the circumstances involved. So long as the Bismarck letter continued to have tax operation in favor of those under that project, he would have been entitled to demand and receive a similar private-letter ruling, or in any event not to be denied the same benefits, as to the identical project and situation involved as to him. The Commissioner could not by refusing to issue such a ruling, or by engaging in one contrary to the deduct-ibility being accorded those in the Bismarck project, foreclose him of the right to claim and receive equal taxpayer treatment.
Where such equality of treatment was demanded by the taxpayer, while the Bismarck ruling remained unrevoked and while it was still operating to confer tax benefits, there can be no question, I think, but that he would be entitled to correction in the courts of the inequality involved against him. If he had not yet paid the taxes, he would be entitled to litigate the question in the Tax Court. If, as here, he had paid the taxes, he would, within the coordinate scheme of the statute for the asserting of tax rights, be entitled to sue in the District Court for refund after claim had been filed.
Here such a claim for refund in relation to the assessments paid is shown by the record to have been initially filed in 1958, within a few months after the taxpayer’s 1957 return was made, and almost two years before the Bismarck ruling was revoked. The taxpayer later filed an amended return and made a repeated claim for refund in relation thereto, but this, however, was not done until after the Bismarck ruling was revoked. Assuming, arguendo, that a taxpayer, in an identical situation as one under the private-letter ruling, is unable, for the first time, after such ruling has been revoked, to make demand for equal treatment as to the period during which the ruling was permitted to operate, that *87question presents no difficulty here, since, as indicated, a claim was made, in effect calling upon the Commissioner to accord equal treatment, while the Bismarck ruling was still operative.
Under neither of the theories which I have discussed, do I regard it as of any materiality that the taxpayer had paid his taxes before the Bismarck letter was issued, or that in making such payment he was not relying on the Bismarck letter as a basis for obtaining recovery of such payment. Under § 7422(b), protest is expressly made unnecessary in the payment of taxes as a basis for recovery right. Further, neither under the Bismarck project nor under the project involved as to the taxpayer here could the payment of taxes have any possible relationship, either legal or equitable, to the Commissioner’s ruling, since the taxes were owed and were collectible against the property irrespective of whether they were or were not permitted to be federally deductible. Incidentally, it may be added also that there is suggestion in the printed record (p. 70) that assessment under the Bismarck project had been made before the time of the Commissioner’s letter.
Finally, I think it should be noted that the District Court was not called upon to consider whether the taxpayer ought to be permitted to recover in relation to the full amount of the assessments which he had paid, or only those which he would have been called upon to pay on an installment basis up to the time of the Commissioner’s revocation. It was stipulated in the pretrial conference that if the taxpayer was entitled to recover, the judgment should be for the amount in which it was entered by the District Court. Here, too, it may incidentally be observed that the record shows that there were some under the Bismarck project who, similarly as the taxpayer here, had paid their assessments in full, and who presumably were allowed to make deduction upon the same basis as the taxpayer was awarded recovery here.
Repeating — I believe that the judgment is entitled to be affirmed.

. Language of Judge Goodrich in Lesavoy Foundation v. Commissioner, 238 F.2d 589, 591 (3 Cir., 1956).