Court Opinion

ID: 4482146
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:20.416149+00
Date Added: 2024-06-11T15:03:38.249134
License: Public Domain

Simpson, J., concurring: Although I agree with the result reached by the majority, I do not agree with the reasons set forth for adopting such result. Rather, I generally agree with the approach taken by Judge Tannenwald of taxing income to the taxpayer who did the work which generated the income. See American Savings Bank, 56 T.C. 828 (1971); Nat Harrison Associates, Inc., 42 T.C. 601 (1964). However, I would find that by taking certain risks, the petitioner did some of the work which generated the income and is taxable under section 61 on the portion of the commission income which he so earned. See Nat Harrison Associates, Inc., supra at 620; cf. Commissioner v. Sunnen, 333 U.S. 591 (1948); Helvering v. Eubank, 311 U.S. 122 (1940); Griffiths v. Commissioner, 308 U.S. 355 (1939); Lucas v. Earl, 281 U.S. 111 (1930). Similarly, the corporation would be taxable on the portion of the income generated by the selling activities of its agents. Nat Harrison Associates, Inc., supra at 620. Even though the Second Circuit has held that section 482 must be used to allocate income between related taxpayers (Rubin v. Commissioner, 429 F. 2d 650 (C.A. 2, 1970), reversing and remanding 51 T.C. 251 (1968)), this Court has not committed itself to the view that section 61 is inapplicable if section 482 might be applied (Richard Rubin, 56 T.C. 1155, 1161 (1971); Local Finance Corp., 48 T.C. 773 (1967), affd. 407 F. 2d 629 (C.A. 7, 1969), certiorari denied 396 U.S. 956 (1969); cf. Philipp Bros. Chemicals, Inc. (Md.), 52 T.C. 240 (1969), affd. 435 F. 2d 53 (C.A. 2, 1970); Grenada Industries, Inc., 17 T.C. 231 (1951), affd. 202 F. 2d 873 (C.A. 5, 1953), certiorari denied 346 U.S. 819 (1953)). In this case, I would apply section 61 so as to tax 25 percent of the income to the petitioner and 75 percent to the corporation. Dawson, J., agrees with this concurring opinion.