Douglass H. and Suzanne M. Bartley - Page 12

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          constitutional is particularly strong.  Black v. Commissioner, 69           
          T.C. 505, 507-508 (1977); Nammack v. Commissioner, 56 T.C. 1379,            
          1383 (1971), affd. per curiam 459 F.2d 1045 (2d Cir. 1972).                 
          Legislatures have particularly broad latitude in creating                   
          classifications and distinctions in tax statutes.5                          
               In the case before us, no denial of the equal protection or            
          due process provisions of the Constitution has occurred.  Section           
          1034 has a rational basis as enacted by Congress in the Revenue Act         
          of 1951, ch. 521, 65 Stat. 452.  Congress enacted section 112(n),           
          the predecessor to section 1034, as an amendment to the 1939                

               5    The wide scope of powers of the legislature under the             
          14th Amendment in the matter of classification was discussed at             
          length by the Supreme Court in Carmichael v. Southern Coal & Coke           
          Co., 301 U.S. 495, 509-510 (1937):                                          
                    It is inherent in the exercise of the power                       
                    to tax that a state be free to select the                         
                    subjects of taxation and to grant exemptions.                     
                    Neither due process nor equal protection                          
                    imposes upon a state any rigid rule of                            
                    equality of taxation. This Court has                              
                    repeatedly held that inequalities which                           
                    result from a singling out of one particular                      
                    class for taxation or exemption, infringe no                      
                    constitutional limitation.                                        
                         Like considerations govern exemptions                        
                    from the operation of a tax imposed on the                        
                    members of a class.  A legislature is not                         
                    bound to tax every member of a class or none.                     
                    It may make distinctions of degree having a                       
                    rational basis, and when subjected to                             
                    judicial scrutiny they must be presumed to                        
                    rest on that basis if there is any                                
                    conceivable state of facts which would                            
                    support it. [Citations omitted.]                                  

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