John R. Hernandez - Page 10

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          37 B.T.A. 249 (1938); Standard Inv. Co. v. Commissioner, 36                 
          B.T.A. 156 (1937).                                                          
               In Riverview State Bank v. Commissioner, 1 T.C. 1147 (1943),           
          following the rationale of the decision of the U.S. Court of                
          Appeals for the Ninth Circuit in Bryant v. Commissioner, supra,             
          we ended much of the controversy surrounding special assessment             
          obligations by holding that the distinction in name only between            
          special assessment bills and special assessment bonds had no                
          bearing on the exclusion.  Riverview State Bank v. Commissioner,            
          supra at 1150.                                                              
               In 1952, the Secretary deleted from the regulations the                
          above-quoted language that had been added in Regulations 86 in              
          1935.  See T.D. 5875, 1952-1 C.B. 15.  The Treasury Decision                
          noted that it was relieving taxpayers from a limitation in the              
          prior regulations.  This deletion was consistent with our                   
          decision in Riverview State Bank v. Commissioner, supra, in which           
          we had rejected the drawing of a distinction between special                
          assessment bonds and bills for purposes of the exclusion.                   
               In Rev. Rul. 56-159, 1956-1 C.B. 609, the Commissioner,                
          following our decision in Riverview State Bank, took the position           
          that nonrecourse special assessment assignable certificates                 
          issued to contractors by a municipality in consideration of                 
          paving improvements were the obligations of a political                     
          subdivision, and thus exempt from income taxation.  The                     
          certificates differed in name only from special assessment bills            

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