Court Opinion

ID: 6888091
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:34:27.480217+00
Date Added: 2024-06-11T16:05:46.399684
License: Public Domain

L. HAND, Circuit Judge
(concurring).
I agree that the order must be reversed, but I would go further and expunge the deficiency. Once one accepts, as we all do, what my brothers call the “subjective test,” it seems to me that there is no evidence which would permit a finding that the taxpayer did in fact “ascertain” that the debt was worthless before 1936. In Jones v. Commissioner, 7 Cir., 38 F.2d 550, and Squier v. Commissioner, 2 Cir., 68 F.2d 25, it was held that as long as a taxpayer paid more money to protect what he had already lent, it was impossible to say that he actually believed the debt to be worthless. I can imagine no motive which should induce a creditor to do so, if he thought the debt worthless, unless it was to give a false appearance of continued belief in its value and to use the loss in a later year. That seems to me to be so extravagantly unreal a supposition on the record before us that we may disregard it. For these reasons I should say that there was no “substantial evidence” to justify the ruling of the Tax Court or the Commissioner, and that the deficiency should be expunged.