- 10 -
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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