Kenneth David Perry and Linda Ruth Perry - Page 2

                                        - 2 -                                         
          $2,465 for 2001 and $21,233.37 for 2003.1  On their 2003 income             
          tax return, petitioners claimed a $14,543.74 refund on account of           
          excess withholding.  Respondent acknowledged the prepayment, but            
          withheld refund or credit of this amount.  On brief, petitioners            
          renew their claim for refund.                                               
               After concessions by petitioners, the issue for decision is            
          whether the $3,000 capital loss allowance limitation of section             
          1211(b) keeps the sections 1 and 55 taxes from being taxes on               
          income, within the meaning of the Sixteenth Amendment to the                
          Constitution.2                                                              
                                     Background                                       
               The instant cases were consolidated for trial, briefing, and           
          opinion.  They were submitted fully stipulated; the stipulations            
          and the stipulated exhibits are incorporated herein by this                 
          reference.                                                                  
               When the petitions were filed in the instant cases,                    


               1 $252 of the 2003 determined deficiency is alternative                
          minimum tax under section 55; the remaining amount for 2003 and             
          the entire amount for 2001 are section 1 income tax.                        
               Unless indicated otherwise, all section and subtitle                   
          references are to sections and subtitles of the Internal Revenue            
          Code of 1986 as in effect for the years in issue.                           
               2 Initially, petitioners also disputed whether the Congress            
          intended the $3,000 limitation to apply to real economic losses.            
          However, on reply brief, petitioners specifically abandon the               
          Congressional intent issue and ask us to determine only “whether            
          Congress exceeded its power granted in Amendment XVI of the US              
          Constitution.”  See infra note 4.                                           




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011