William J. Brennan, Jr.

“ That interpretation might be properly put upon his acquiescence only if, first, the Tax Court in Caulkins squarely decided that any discount element in the amount realized by the taxpayer on the retirement of the certificate was not to be taxed as ordinary income but as capital gain, and second, the decision of the Tax Court should be read as holding that the tax treatment of gain attributable to discount is the same on sales and retirements. ”

“ Insofar as petitioners' arguments question the policy of empowering the Commissioner to correct mistakes of law retroactively when a taxpayer acts to his detriment in reliance upon the Commissioner's acquiescence in an erroneous Tax Court decision, [11] their arguments are more appropriately addressed to Congress. Congress has seen fit to allow the Commissioner to correct mistakes of law, and in § 7805 (b) has given him a large measure of discretion in determining when to apply his corrections retroactively. In the circumstances of this case we cannot say that this discretion was abused. ”

“ In Caulkins the Tax Court allowed capital gains treatment of the full amount received by the taxpayer upon the retirement of an 'Accumulative Installment Certificate,' a debt security under which the lender made 10 annual remittances to the borrower in the amount of $1,500 each in return for a payment of $20,000 in the tenth year. See United States v. Midland-Ross Corp., supra, 381 U.S., at 63, 85 S.Ct. at 1313. The result gave capital gains treatment to an amount corresponding to but not in the form of original issue discount. ”