Drs. Hill & Thomas Co., an Ohio Corporation v. United States

This is a tax case in which appellant seeks to raise the question of the validity or invalidity of Treasury Regulation 301.7701-2. This Regulation, effective in 1965, 1 if valid, rules out the taxation of plaintiff company as a corporation. The net effect would be to allow the income to flow through to the doctors who are shareholders. The ultimate effect would be to require their taxation on a partnership basis.

Here plaintiff company paid taxes without taking certain deductions and then filed suit for refunds. For the only year in dispute, 1965, the Commissioner tendered not just the refund…