Investors Insurance Agency, Inc. v. Commissioner of Internal Revenue

Under the rubric of honoring the intentions of the parties, the majority today subjects a taxpayer to a tyranny of labels.1

The Commissioner offers no coherent theory to support his characterization of the $130,000 payment as interest,2 and the majority does no better. With virtually no exploration of the economic substance of the 1963 Joint Venture Agreement or the 1969 Amendment to that agreement, the majority concludes that because the parties calculated the payment as 6% of $350,000 and labeled it in their dealings as interest, it should be treated as interest for tax purposes.

I readily…