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Secretary is not bound by his revenue rulings to be dictum.
Indeed, the Court of Appeals for the Fifth Circuit, without
mentioning Stubbs, subsequently rejected an argument by the
Commissioner that he was not bound by his revenue rulings.
Estate of McLendon v. Commissioner, 135 F.3d 1017 (5th Cir.
1998), revg. T.C. Memo. 1996-307; see also Silco, Inc. v. United
States, 779 F.2d 282 (5th Cir. 1986). The Court of Appeals, in
Estate of McLendon v. Commissioner, supra at 1024-1025, stated:
Most questions of deference to a revenue ruling involve
an argument by the taxpayer that a particular ruling is
contrary to law. Here, however, the argument to ignore
or minimize the effect of Rev. Rul. 80-80 comes from
the Commissioner, the very party who issued the ruling
in the first place. In such a situation, this circuit
has a well established rule that is sufficient to
resolve this case without probing the penumbrae of the
general deference question. [Fn. ref. omitted.]
* * * * * * *
Silco stands for the proposition that the
Commissioner will be held to his published rulings in
areas where the law is unclear, and may not depart from
them in individual cases. Furthermore, under Silco the
Commissioner may not retroactively abrogate a ruling in
an unclear area with respect to any taxpayer who has
relied on it. [Fn. ref. omitted.]
Applying Silco to this case, it quickly becomes
clear that Rev. Rul. 80-80 must govern our decision.
McLendon went to great lengths to structure his
transaction to comply with applicable law, and the
Commissioner does not dispute that in so doing McLendon
expressly relied on Rev. Rul. 80-80’s clarification of
the admittedly murky area of future and dependent
interest valuation. The Commissioner ignored the clear
language of his own ruling in declaring deficiencies,
and it is precisely this kind of tactic that Silco
declares to be intolerable. * * * [Fn. ref. omitted.]
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