Clayton J. Charbonnet and Adelaide Tutt, Wife of Clayton J. Charbonnet v. United States

GODBOLD, Circuit Judge:

This tax refund suit arises as a result of the Commissioner’s having, by regulation, woven into the fabric of the investment tax credit and credit recapture provisions of the Internal Revenue Code the threads of the Code’s Subchapter S provisions. After examining the regulations which are the Commissioner’s handiwork, we agree with the District Court’s conclusion 320 F.Supp. 874, that the appellants 1 are not entitled to a refund.

Taxpayer, a resident of Louisiana, was the sole owner of a proprietorship prior to 1965. On January 1, 1965 he formed a corporation, American…