Frank Murphy

“ If by 'first return made by a taxpayer having net income derived from a property', petitioner means first return for a year in which there actually was net income, cf. Kehoe-Berge Coal Co. v. Commissioner, 3 Cir., 117 F.2d 439, it could not be known in some cases whether a taxpayer was put to its election in 1934 or a later year until after finally determining, perhaps after protracted litigation, whether or not the taxpayer had actual net income in 1934. ”

“ The uncertainty and confusion thereby created would be most undesirable; a taxpayer could not intelligently plan its operations, and the Bureau of Internal Revenue would be compelled to keep open all the returns for subsequent years in order to check the later depletion deductions. If it is petitioner's contention that the critical fact of net income is disclosed by the face of the return, the obligation to state an election would depend to some extent upon the errors of the taxpayer, a consequence which it is not to be presumed that Congress intended. ”

“ All taxpayers are put on an equal basis if they must elect their depletion program in the first return filed 'in respect of a property'; a taxpayer, situated as petitioner, is not then free to defer election until it has net income at some future date when conditions may be such that its election can be made more advisedly than that of its competitors. ”