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Palm Beach Trust Co. v. Commissioner of Internal Revenue

United States Court of Appeals, District of Columbia Circuit
Apr 18, 1949
174 F.2d 527 (D.C. Cir. 1949)

Opinion

No. 9865.

Argued March 24, 1949.

Decided April 18, 1949.

On Petition for Review of Decision of the Tax Court of the United States.

Petition by Palm Beach Trust Company for review of a decision of the Tax Court of the United States 9 T.C. 1060, redetermining liability of petitioner for surtaxes and penalties imposed by Commissioner of Internal Revenue.

Decision affirmed in part and reversed in part.

Mr. B.H. Bartholow, of New York City, for petitioner.

Mr. S. Dee Hanson, Sp. Asst. to the Atty. Gen., with whom Messrs. Ellis N. Slack and A.F. Prescott, Sp. Assts. to the Atty. Gen., of Washington, D.C., were on the brief, for respondent.

Mr. Lee Anderson Jackson, Sp. Asst. to the Atty. Gen. and Mr. Charles Oliphant, Chief Counsel, Bureau of Internal Revenue. and Mr. John M. Morawski, Sp. Atty., Bureau of Internal Revenue, both of Washington, D.C., also entered appearances for respondent.

Before WILBUR K. MILLER and PRETTYMAN, Circuit Judges, and WATKINS, District Judge, sitting by designation.


This is a petition for review of a decision of the Tax Court of the United States. We think that court was right in its ruling upon petitioner's liability for the personal holding company surtax. Its decision in that respect is affirmed upon the opinion of Judge Opper. In respect to the delinquency penalty, however, we disagree. Petitioner company was originally organized prior to the imposition of the personal holding company surtax, and it had an original business purpose quite apart from tax considerations. There was a question debatable in good faith concerning the application to it of the statutory exceptions. While those considerations do not bear upon its liability for the tax, they do bear upon liability for penalties. The decision upon the penalties is, therefore, reversed.

1947, Palm Beach Trust Co., 9 T.C. 1060.

Orient Investment Finance Co. v. Commissioner of Internal Revenue, 1948, 83 U.S.App.D.C. 74, 166 F.2d 601, 3 L.R.A.2d 612, and cases there cited; Spies v. United States, 1943, 317 U.S. 492, 496, 63 S.Ct. 364, 87 L.Ed. 418.

Affirmed in part and reversed in part.


Summaries of

Palm Beach Trust Co. v. Commissioner of Internal Revenue

United States Court of Appeals, District of Columbia Circuit
Apr 18, 1949
174 F.2d 527 (D.C. Cir. 1949)
Case details for

Palm Beach Trust Co. v. Commissioner of Internal Revenue

Case Details

Full title:PALM BEACH TRUST CO. v. COMMISSIONER OF INTERNAL REVENUE

Court:United States Court of Appeals, District of Columbia Circuit

Date published: Apr 18, 1949

Citations

174 F.2d 527 (D.C. Cir. 1949)

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