Court Opinion

ID: 4480430
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:17.608419+00
Date Added: 2024-06-11T14:53:59.499391
License: Public Domain

Simpson, /., dissenting: I have concluded that the body of law-regarding charitable contributions requires me to dissent from the opinion of the majority. The treatment of charitable contributions of unreported income has a long and controversial history. Several efforts have been made to require taxation of such income for which a charitable deduction is claimed or to restrict the deduction to the basis of the contributed property; yet, all these efforts have been unsuccessful. An attempt at legislation was made by the House of Representatives in 1938, when it approved a provision limiting the deduction to the basis of contributed property; but the Congress as a whole rejected the provision.1 An administrative attempt was made by the Internal Revenue Service when it issued I.T. 3910,1948-1 C.B. 15, requiring a farmer to include in gross income the fair market value of agricultural products which he contributed to charity, but that attempt was rejected by the courts. Campbell v. Prothro, 209 F. 2d 331 (C.A. 5, 1954); White v. Brodrick, 104 F. Supp. 213 (D. Kans. 1952). The Treasury has accepted these decisions by providing in the regulations that a manufacturer or supplier can deduct his selling price (sec. 1.170-1 (c), Income Tax Regs.; cf. Rev. Rui. 55-138, 1955-1 C.B. 223, revoking I.T. 3910, sufra,). In 1963, when the President proposed that the unrealized appreciation in value of property be taxed upon a gift of the property, a contribution to charity was expressly excepted from the proposal. See H. Doc. Ho. 43, 88th Cong., 1st Sess., p. 20 (1963). Thus, it has become well established in our law that when there is a charitable contribution, the deduction is measured by the value of the contributed property, and there is no requirement that the unrealized income be reported. As a Court, we must interpret the law so as to carry out its purposes with intelligence and responsibility. At times we must chart the way; but at other times the path is staked out for us, and then our course is circumscribed. For my part, I cannot see that this case is in substance distinguishable from the precedents. However much one may agree, or disagree, with those precedents, I believe that we should not grasp at what appears to me to be an insubstantial distinction to bring about a different result. In connection with this situation, it seems to me that both the Administration and the Congress have acquiesced in the practice of not reporting income as a result of a contribution of property to charity. Those precedents establish the law, and I believe that we have no sufficient reason in this case for not following them. If the Congress wishes a different result, the change should be brought about by legislation.   H. Rept. No. 1860, 75th Cong., 3d Sess., p. 20 (1938) ; S. Rept. No. 1567, 75th Cong., 3d Sess., p. 14 (1938) ; Conf. Rept. No. 2330, 75th Cong., 3d Sess., p. 35 (1938).