Louis J. Kocurek and Millie M. Kocurek v. United States

TATE, Circuit Judge.

This is a taxpayer’s suit for a refund of income taxes paid. 28 U.S.C. § 1346(a)(1). The taxpayers appeal from denial of their refund. See Kocurek v. United States, 456 F.Supp. 740 (W.D.Texas, 1978).

Before us is an issue of first impression. It concerns the application and construction of several sections of the Internal Revenue Code of 1954, as amended, Subtitle A-26, Income Taxes, 26 U.S.C. §§ 1-1552. The issue involves the proper characterization of a distribution from a regulated investment company (popularly known as a “mutual fund”), sections 851-55, I.R.C., for…