-83-
compelling equitable consideration is present so as to serve
elementary justice. The Court of Appeals for the Fourth Circuit
held specifically in Ardbern Co. v. Commissioner, supra at 426,
that former section 233 does not forbid a taxpayer from
deducting expenses when the taxpayer files, or attempts in good
faith to file, a return claiming those deductions before the
Commissioner determines a deficiency against the taxpayer or
files a substitute return on the taxpayer’s behalf. Accord
Blenheim v. Commissioner, supra at 908 (“It is true that this
section [section 233 of the 1928 and 1932 Revenue Acts] contains
no reference to a time element.”).
XI. Conclusion
On the basis of the foregoing, we conclude that the
disputed regulations are invalid to the extent described herein.
Given the plain meaning of the relevant text and the historical
setting laid out in detail in this Opinion, including caselaw,
legislation, legislative history, and regulations, the
Secretary’s adoption of a timely filing requirement and his
attempted sub silentio overruling of contrary judicial and
administrative precedents is unreasonable under Natl. Muffler
Dealers Association v. United States, 440 U.S. 472 (1979).30
30 We note that this case is strikingly similar to Anglo-Am.
Direct Tea Trading Co. v. Commissioner, 38 B.T.A. 711 (1938),
where the taxpayer was allowed to receive the benefit of its
deductions upon the untimely filing of returns more than
(continued...)
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