Old Colony Trust Co. v. Commissioner,
279 U.S. 716 (1929)

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U.S. Supreme Court

Old Colony Trust Co. v. Commissioner, 279 U.S. 716 (1929)

Old Colony Trust Co. v. Commissioner of Internal Revenue

No. 130

Argued January 10, 11, 1929

Reargued April 15, 1929

Decided June 3, 1929

279 U.S. 716


1. A proceeding before the circuit court of appeals, under Revenue Act of 1926, §§ 283(b), 1001 et seq., in which a taxpayer sought review of a decision of the Board of Tax Appeals finding a deficiency in his income tax return, held to present a " case or controversy " cognizable by that court under the judicial article of the Constitution. Pp. 279 U. S. 722 et seq.

2. A proceeding begun by an administrative or executive determination may be a "case or controversy" when it comes on review before a court if it calls for the exercise of judicial power only; nor is it essential that there should be power to award execution where the final judgment establishes a duty of an executive department and is enforceable through action of the department. P. 279 U. S. 722.

3. Under §§ 1001-1005 of the Revenue Act of 1926, the courts authorized to review decisions of the Board of Tax Appeals have power to award execution of their final judgments. P. 279 U. S. 726.

4. Assuming that, under § 283(b) of the Revenue Act of 1926, a taxpayer whose appeal to the Board of Tax Appeals was taken before the date of that Act and decided adversely to him after it may resort both to the circuit court of appeals by way of review and to the district court by way of an action to recover the tax (having first paid it), this does not prevent the circuit court of appeals, being a constitutional court, from having jurisdiction under the Act, since, on the principle of res judicata, if both remedies were pursued, the judgment first in time would be a final adjudication conclusive on both courts. P. 279 U. S. 727.

5. A certificate by the circuit court of appeals of a question of law involved in a review of a decision of the Board of Tax Appeals held within the appellate jurisdiction of this Court under the Constitution. P. 279 U. S. 728.

6. Payment by an employer of the income taxes assessable against the compensation of an employee, made in consideration of his services, constitutes additional taxable income of the employee under the Revenue Act of 1918. P. 279 U. S. 729.

Page 279 U. S. 717

7. The objection that this construction would lead to an absurdity not contemplated by Congress if the employer were called upon to pay the tax on the additional income and a further tax on that payment, and so on, will not he considered, no attempt having been made by the Treasury to collect further taxes upon the theory that payment of additional taxes creates further income. P. 279 U. S. 730.

Response to a question of law certified by the circuit court of appeals, arising upon review of a decision of the Board of Tax Appeals approving a finding by the Commissioner of Internal Revenue of deficiencies in income tax returns. See 7 B.T.A. 648. This case was reargued and decided with the one next following. *

Page 279 U. S. 718

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