“The total exclusion of an item from the recipient’s gross income is a question of characterization that is unrelated to the taxpayer’s method of accounting.”
How later courts described this case
- “The total exclusion of an item from the recipient’s gross income is a question of characterization that is unrelated to the taxpayer’s method of accounting.”
- addressing a “total exclusion” from gross income
Written by the judges who cited it.
The opinion
Chiechi, J., concurring: I write separately to explain that I concur in the result reached by the majority and its holding that, to the extent section 1.267(a)-3, Income Tax Regs., requires petitioner to deduct interest payable to PLC using the cash method, it is invalid because it does not apply the matching principle of section 267(a)(2). However, I do not agree with, and therefore do not join in, the majority’s conclusion that, even if that regulation were valid, its retroactive application from the date it was issued on December 31, 1992, to petitioner’s taxable years ended September 29, 1985, September 28, 1986, and September 26, 1987, violates the Due Process Clause of the Fifth Amendment to the Constitution.
Chabot, Cohen, and Wells, JJ., agree with this concurring opinion.