explaining that section 235 HUD mortgage payments on behalf of low and moderate income families are “direct general welfare benefits not taxable”
How later courts described this case
- explaining that section 235 HUD mortgage payments on behalf of low and moderate income families are “direct general welfare benefits not taxable”
- Commissioner has power to correct mistakes of law in the application of the tax laws to particular transactions even where a taxpayer may have relied to his detriment on the Commissioner's mistake
- discussing the traditional elements of equitable estoppel
- minimum tax on capital gains is an income tax and is not subject to apportionment among the states or by census under the Sixteenth Amendment
Written by the judges who cited it.
The opinion
PER CURIAM:
Having carefully considered the briefs and arguments of the parties in this appeal, taken on undisputed facts, we find ourselves in agreement with the rulings of the Tax Court on the points brought forward to us: that interest reduction payments made by the Department of Housing and Urban Development (HUD) on the taxpayer’s-mortgagee’s behalf pursuant to Section 236 of the National Housing Act, 12 U.S.C. § 1715z-l, are includable in his gross income, and that in the circumstances of this case the Commissioner of Internal Revenue is not equitably estopped by incorrect representations of law made by officials of HUD from collecting the resulting income tax deficiency from the taxpayer.
Further, finding ourselves in agreement with the careful opinion of Judge Simpson for that court, reported at 74 T.C. 743 (1980), we adopt it as our own. In particular, we agree that had the Congress intended so significant a departure from general principles of taxation as the taxpayer contends for here it would have done so in clear terms of legislation, as it did regarding other incentives furnished such sponsors of Section 236 projects. We add that taxpayer’s reliance on tentative pronouncements of the Revenue Service regarding Section 235 of the Act as indicative of its position on Section 236, that with which we deal here, is misplaced. Section 236 payments are substitutes for rentals, permitting the sponsor to operate profitably at lower rates of such returns. Rentals, however, are gross income, where Section 235 payments are not rental substitutes but rather direct general welfare benefits not taxable.
The judgment of the Tax Court is
AFFIRMED.