Fred M. Vinson

“ And, as in this case, what was no net operating loss at all for the year when the event occurred becomes a loss for that year through subsequent changes in the statutes. Similarly, in some cases in which the taxpayer had net income for the year under controlling law, subsequent changes in the law might produce a net operating loss for that year if petitioner's construction of the statute prevailed. We find no warrant for the view that Congress intended that a statute designed to equalize tax burdens should be used to produce net losses where none had previously existed. ”

“ First, under petitioner's theory, the net operating loss sustained in any given year would not be a fixed amount but would vary from year to year depending upon changes in the tax laws. But § 122 (a) defines net operating loss as 'the excess of the deductions allowed by this chapter over the gross income'. Clearly, determination of the amount of gross income and of allowable deductions for any given year must depend upon the tax statutes in effect during that year. ”

“ An asserted conflict between the decision below and that of the Court of Appeals for the Fifth Circuit in Commissioner of Internal Revenue v. Moore, Inc., 151 F.2d 527, made this an appropriate case for our review on writ of certiorari. [1] A recital of the facts must precede definition of the issue. ”