Thompson v. Commissioner
United States Tax Court
1. During 1973 and 1974, petitioner Westward, Inc., purchased tax refund claims from taxpayers filing Form 1040 or 1040A Federal income tax returns. Westward, Inc., would pay a taxpayer an amount equal to two-thirds of the refund due the taxpayer in exchange for the right to receive any refund made by the IRS.
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1. During 1973 and 1974, petitioner Westward, Inc., purchased tax refund claims from taxpayers filing Form 1040 or 1040A Federal income tax returns. Westward, Inc., would pay a taxpayer an amount equal to two-thirds of the refund due the taxpayer in exchange for the right to receive any refund made by the IRS. Held, the discount income Westward, Inc., derived on the receipt of taxpayers' refund checks does not constitute "interest" within the meaning of sec. 1372(e)(5), I.R.C. 1954. Held, further, Westward, Inc.'s election under sec. 1372(a) to be treated as a small business corporation…
1Opinion of the Court
Fay, Judge:
Respondent determined deficiencies in petitioners’ Federal income taxes and additions to taxes as follows:
Docket No. Petitioner Year Deficiency Addition to tax sec. 6653(a)1
4396-77 John D. Thompson 1973 $5,752 $288
1974 6,814 341
4397-77 Westward, Inc. 1973 11,925
1974 5,338
These cases have been consolidated for purposes of trial, briefing, and opinion.
Concessions having been made,2 the remaining issues for decision are:(1) Whether more than 20 percent of the gross receipts of petitioner Westward, Inc., for its taxable year 1973 was “interest” and therefore passive investment income…
2Cases cited30 opinions
- Deputy, Administratrix v. Du PontSupreme Court of the United States · 1940
- Old Colony Railroad v. CommissionerSupreme Court of the United States · 1932
- John Kelley Co. v. CommissionerSupreme Court of the United States · 1946
- Litton Business Systems, Inc. v. CommissionerUnited States Tax Court · 1973
- A. R. Lantz Co., Inc. v. United StatesCourt of Appeals for the Ninth Circuit · 1970
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3Cited by11 opinions
- HomeStreet, Inc. v. STATE, DEPT. OF REVENUEWashington Supreme Court · 2009
- HomeStreet, Inc. v. Department of RevenueWashington Supreme Court · 2009
- La Staiti v. CommissionerUnited States Tax Court · 1980
- Sanders v. CommissionerUnited States Tax Court · 1980
- Fuller v. CommissionerUnited States Tax Court · 1980
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