Court Opinion

ID: 6896250
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:50:02.70669+00
Date Added: 2024-06-11T16:06:00.704939
License: Public Domain

HUTCHESON, Circuit Judge
(dissenting).
The majority opinion correctly states that petitioner voluntarily and on the advice of his counsel, that he owed the money as interest, paid to his corporation $27,-058.75, and that the corporation later distributed this sum to him and to his sons as .a liquidating dividend. Asked, “Now, as a matter of fact, by making this payment of interest to the corporation, you had it figured out that it would save considerable taxes, did you not ?” Howell answered, “It was understood that it would save taxes on it. That is true.” I cannot see how the taxpayer can now successfully contend that money which he paid his corporation, not ■only voluntarily but pursuant to a deliberately thought out plan, money which the corporation thereafter distributed to him and the other stockholders as part of a liquidating dividend, was not in fact and in law the property of the corporation and that he is not liable to a tax on it. The determinations of the Tax Court, that petitioner could not claim a deduction > for it as for interest paid and that the corporation could not be held liable for it as for interest received, of which the majority makes so much, seem to me to be wholly without bearing upon the determination of the sole question presented here. That question is, “Was the money actually paid to the company as its money with the intention that it should receive it and ‘deal’ with it as its own, and was it paid out by the company as a liquidating dividend?” To this question the record admits only of the answer that it was. The first two determinations are not before us for review, as neither Howell nor the commissioner has appealed from them. If they were, I should be constrained to.hold that probably as to Howell and certainly as to the corporation, the Tax Court’s determinations were incorrect in law. I cannot see how the fact that the Tax Court has incorrectly determined these two issues can furnish a basis for reversing its correct determination and requiring it to make a wrong determination in respect of the one actually before us. We said in Planters’ Cotton Oil Co. v. Hopkins, 5 Cir., 53 F.2d 825, at page 827: “Fraudulent pretense absent, the government accepts the taxpayer as it represents itself to be, and one may not, chameleon-like, change that appearance to suit his necessity or his convenience.” In Commissioner v. Greenspun, 5 Cir., 156 F. 2d 917, we held that the taxpayer could not play fast and loose with the government, and that having put the shoe on, he must wear it though it pinches. We should make the same holding here. I think th'e Tax Court’s determination was right and that it should be affirmed. I respectfully dissent from its reversal.