Collector of internal revenue

“ A corporation, joint-stock company or association, or insurance company, keeping accounts upon any basis other than that of actual receipts and disbursements, unless such other basis does not clearly reflect its income, may, subject to regulations made by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, make its return upon the basis upon which its accounts are kept, in which case the tax shall be computed upon its income as so returned. ”

“ Devoting one's time and energies to the affairs of a corporation is not of itself, and without more, a trade or business of the person so engaged. Though such activities may produce income, profit or gain in the form of dividends or enhancement in the value of an investment, this return is distinctive to the process of investing and is generated by the successful operation of the corporation's business as distinguished from the trade or business of the taxpayer himself. ”

“ The requirement of consolidated returns was 'based upon the principle of levying the tax according to the true net income and invested capital of a single business enterprise, even though the business is operated through more than one corporation.' Treasury Regulations No. ”

“ The congressional purpose to tax all stockholders who receive distributions of corporate earnings and profits cannot be frustrated by any reorganization which leaves earnings and profits undistributed in whole or in part. ”

“ If the corporation receiving such other property or money does not distribute it in pursuance of the plan of reorganization, the gain, if any, to the corporation shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property so received, which is not so distributed. ”

“ Corporate accounting may represent that correspondence between change in the form of capital structure and essential identity in fact which is of the essence of a transaction relieved from taxation as a reorganization. What is controlling is that a new arrangement intrinsically partake of the elements of reorganization which underlie the Congressional exemption and not merely give the appearance of it to accomplish a distribution of earnings. ”

“ For example, if we were to inquire whether or not the profit would have been ordinary income had an enterprise been individually owned, would we treat each taxpaying shareholder differently and look only to his trade or business or would we consider the matter in terms of the trade or business of any or at least a substantial number of the shareholders? ”

“ Prior to 1934, as now, personal holding companies were liable for the regular corporation income taxes under Title I of the Revenue Acts and they, like all other corporations, were subject to additional tax upon an accumulation of profits where there was present a purpose of avoiding surtaxes upon shareholders. ”

“ Absent substantial additional evidence, [11] furnishing management and other services to corporations for a reward not different from that flowing to an investor in those corporations is not a trade or business under § 23 (k) (4) . ”

“ But to recognize the increment in value as affecting earnings and profits would no more harmonize with the taxless character of the transaction than to treat a realized gain as doing so. The same policy which carries over the transferor's basis for purposes of the corporation's income tax, § 113 (a) (8) , requires carrying it over for determining the taxability of its distributions as the Commissioner's regulation directs: gains and losses are to be brought into earnings and profits at the time and 'to the extent' that they are recognized under § 112. ”

“ The Revenue Act of 1921 defines gross income as including gains, profits, and income derived by the taxpayer from any source whatever, and provides that in computing net income of a corporation 'all interest paid or accrued within the taxable year on its indebtedness' is deductible from such gross income. Treasury regulations promulgated under authority of the statute state that if bonds are issued by a corporation at a premium the net amount of such premium is gain or income which should be amortized over the life of the bonds. ”

“ Instead of leaping from this premise to the conclusion that there was no sale or exchange, the Government might more profitably have broken the transaction into components and attempted to distinguish between the interest which respondents retained and the interest which they exchanged. The worth of a business depends upon its ability to produce income over time. What respondents gave up was not the entire business, but only their interest in the business' ability to produce income in excess of that which was necessary to pay them off under the terms of the transaction. ”

“ The majority opinion faults the Commissioner for having 'commingled two distinct * * * concepts of tax accounting depreciation of an asset through wear and tear or gradual expiration of useful life and fluctuations in the value of that asset through changes in price levels or market values.' In my opinion these two concepts, as used in the Internal Revenue Code, are necessarily commingled and it is unrealistic to expect that one can be isolated from the other. ”

“ Commissioner of Internal Revenue, supra, must be deducted from the taxpayer's initial investment in the asset in order to arrive at a depreciable 'net investment.' I use the word 'investment' rather than 'cost' because 'cost' may have so many different meanings, both to the accountant and to the tax lawyer, and some of those meanings would do considerable violence to the congressional purpose for depreciation allowances.↑ Useful life is to reflect the realities of the taxpayer's actual experience rather than a possibly unrealistic conceptualized idea of inherent physical life. Massey Motors v. ”

“ While the Sub-Treasury system lasts Congress should authorize the Secretary to deposit customs, as well as internal revenue receipts, in the national bank depositaries, in time of stringency, when the Government’s receipts exceed its disbursements, and it has more than a sufficient working balance. ”

“ It shall be lawful for collectors of internal revenue to receive for internal taxes and all public dues certified checks drawn on National and State banks, and trust companies during such time and under such regulations as the Secretary of the Treasury may prescribe. ”

“ Briefly stated, in the case of a distribution to a corporation with a deficit from either current or prior losses, the corporation receiving the distribution has no taxable income or earnings or profits available for current distribution until current income excees current losses, and no accumulated earnings or profits until its actual deficit from prior losses is erased. ”

“ For instance, a corporation keeping its books and filing its income tax return under sections 41, 42, and 43 on the cash receipts and disbursements basis may not use the accrual basis in determining earnings and profits; a corporation computing income on the installment basis as provided in section 44 shall, with respect to the installment transactions, compute earnings and profits on such basis ”

“ There the people heard the list of fines levied in the courts; of tolls in the market, or taxes taken at the gates or in the harbour; of the “maltodes,” or sums paid on commodities for sale; of the “scot” levied on the property of individuals; of the “lyvelode” or livelihood, an income tax on rates or profits earned. They learned what means the corporation had taken of increasing the common revenue ”

“ It is my wish that the collection of the revenue should be organised on a strictly business basis, with the same guarantees for efficiency and fidelity in the selection of the chief and subordinate officers that would be required by a prudent merchant. ”

“ Nor is it only our revenue from duties that would be increased to an extent sufficient of itself, in a few years, to pay the principal and interest of the debt incurred in the construction of these works, but our internal revenue, also, would be prodigiously augmented. ”

“ The sole question for decision is whether gain accruing to a corporation consequent on the purchase and resale of its own shares constitutes gross income within the meaning of Section 22 (a) of the Revenue Act of 1928. ”

“ The credit of the State may be pledged for corporations formed for the purpose of making internal improvements within the State, by subscriptions of Stock, or by loans to the extent of one-fifth of the capital. ”

“ The executive committee of the several local associations shall set apart one-half of the net profits so certified to by the United States auditor as a part of its surplus account and may carry the balance as undivided profits, or may declare and pay such a dividend out of the undivided profits as in their judgment seems wise. ”

“ The dealers involved in these cases recorded on their books in the years the installment paper was sold, and included in their income tax returns for those years, the cash received from the finance companies, but they did not accrue on their books or include in their returns he percentage of the price that was retained by the finance companies and credited to their reserve accounts. ”

“ The fact that its measure is gross revenue is consistent with a tax on the privilege of doing a volume of business which would yield that revenue, just as the Legislature indicated. But we have declined to regard mere gross receipts as a sound measure of going-concern value in a practical world of commerce, where values depend on profitableness of a business, not merely its volume. ”

“ Pardon me for adding that the sweeping changes in the internal revenue collectorships have always struck me as questionable proceedings. Those places were not put under the four-years-term rule for the very purpose of withdrawing them from periodical change. ”

“ In response to the claim the Commissioner advised the taxpayer that he could not consider the propriety of a special assessment until the statutory net income and invested capital were determined and asked the taxpayer, therefore, to acquiesce in the net income and invested capital shown in the revenue agent's report or submit any exceptions it might have thereto. ”

“ The revenue involves not only the supply of the treasury with money, but the question of protection to manufactures. On these connected subjects, therefore, Gentlemen, as I have promised to keep nothing back, I will state my opinions plainly, but very shortly.
I am in favor of such a revenue as shall be equal to all the just and reasonable wants of the government; and I am decidedly opposed to all collection or accumulation of revenue beyond this point. An extravagant government expenditure, and unnecessary accumulation in the treasury, are both, of all things, to be most studiously avoided. ”

“ The Government were fortunate in securing the services of a very competent senior commissioner, who, with his colleagues, has been able, without lowering the rate of wages, to reduce the percentage of working expenses to gross revenue from 66.69 to 54.46 per cent., and has increased the net return on capital from 2.85 to 3.60 per cent. ”

“ Municipal corporations as well as the State may levy taxes on the taxable property of the citizens, but all taxes, State and municipal, are collected by the collectors of the towns. Joint stock companies, and all chartered corporations, except banking, insurance, railroad, and savings corporations, &c., are subject to these regulations. ”

“ The tax commissioner was required to ascertain the true market value of its shares, and to estimate the fair cash valuation of all the shares constituting its capital stock, and the corporation was required to pay annually 'a tax upon its corporate franchise at a valuation thereof equal to the aggregate value of the shares in its capital stock,' as so determined by the tax commissioner ”

“ And on the same principle a note given for a wager on the future amount of a branch of the public revenue is declared void; because it interests an individual in diminishing the production of the revenue. ”

“ These provisions plainly do not lay down any rigid rule of accounting to be applied to consolidated returns which would exclude from the computation of taxable income the results of every intercompany transaction, regardless of its effect upon the capital or the net gains or losses of the business of the affiliated corporations. ”

“ He plans to raise only just enough revenue to satisfy the grants made in Committee of Supply, and leave a modest surplus to cover possible errors in the estimates and probable fluctuations in the returns from taxation. Our Committee of Ways and Means, on the other hand, follow a very different policy. The revenues which they control are raised for a double object. They represent not only the income of the government, but also a carefully erected commercial policy to which the income of the government has for many years been incidental. ”

“ The General Trading Company is, in the language of the opinion, made 'the tax collector for the tax.' We have heretofore held, and I think properly, that the state may make tax collectors of those who come in and do business within its jurisdiction, for thereby they submit themselves to its power. ”

“ The corporation is required to state in its annual return to the tax commissioner from what general source its profits are principally derived. If the company's net profits are derived principally from ownership, sale, or rental of real property, or from the sale or use of tangible personal property, the tax is imposed on such proportion of the whole net income as the fair cash value of the real and the tangible personal property within the state bears to the fair cash value of all the real and tangible personal property of the company. ”

“ The public revenue is derived from the custom duties, direct taxes on property, licenses to trade houses, stamped paper, stamps, import and export duties, port dues, municipal duties in the capital and in the departments, duties on indirect inheritance, trade patents, cattle marks, etc. ”