Dittler Bros., Inc. v. Commissioner
United States Tax Court
Action for declaratory judgment as to reasonableness of respondent's determination under sec. 7477(a), I.R.C. 1954. Petitioner received a final adverse determination letter from respondent stating that the transfer of cash and property to a foreign corporation in exchange for stock was in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes in violation of sec. 367(a)(1), and sec. 2.02, Rev. Proc. 68-23, 1968-1 C.B. 821. Held, on…
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Action for declaratory judgment as to reasonableness of respondent's determination under sec. 7477(a), I.R.C. 1954. Petitioner received a final adverse determination letter from respondent stating that the transfer of cash and property to a foreign corporation in exchange for stock was in pursuance of a plan having as one of its principal purposes the avoidance of Federal income taxes in violation of sec. 367(a)(1), and sec. 2.02, Rev. Proc. 68-23, 1968-1 C.B. 821. Held, on the facts established by the administrative record and assumed to be true, respondent's determination was not reasonable.
1Concurring in part, dissenting in partHall, J.
The majority opinion appears correct in rejecting respondent’s absolute refusal to grant a favorable section 367 ruling. However, under the statute we have the further duty of determining what, if any, conditions should be attached to a favorable ruling. The majority would deprive respondent of the opportunity to impose such conditions because he failed to specify whether (if forced to rule favorably) he would impose conditions and if so what those conditions would be. The majority does not state whether respondent must specify such conditions as a fallback position in his original adverse…
2Cases cited2 opinions
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