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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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