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degree as when a gross-receipt item of the same amount
is completely omitted from a tax return.
On the other hand, the taxpayer contends that the
Commissioner’s reading fails to take full account of
the word “omits,” which Congress selected when it could
have chosen another verb such as “reduces” or
“understates,” either of which would have pointed
significantly in the Commissioner’s direction. The
taxpayer also points out that normally “statutory words
are presumed to be used in their ordinary and usual
sense, and with the meaning commonly attributable to
them.” De Ganay v. Lederer, 250 U.S. 376, 381. “Omit”
is defined in Webster’s New International Dictionary
(2d ed. 1939) as “To leave out or unmentioned; not to
insert, include, or name,” and the Court of Appeals for
the Sixth Circuit has elsewhere similarly defined the
word. Ewald v. Commissioner, 141 F.2d 750, 753.
Relying on this definition, the taxpayer says that the
statute is limited to situations in which specific
receipts or accruals of income items are left out of
the computation of gross income. For reasons stated
below we agree with the taxpayer’s position. [Id. at
32-33.]
Although the numbering of the sections as part of recodifications
of the Internal Revenue Code has changed, we see little change in
the rationale of the applicable statute. Thus, the Supreme Court
holding would apply equally to BEP’s return.
Respondent’s memorandum brief in support of motion for
partial summary judgment maintains that BEP:
properly reported the gross sales price of $23,898,611
on the Form 4797, but that it only reported $5,390,383
of the related net gain under I.R.C. sec. 1231
(understating the net gain by $16,515,194). * * * On
its return for the 1998 Taxable Year, * * * [BEP]
reported gross income totaling $8,038,677, including
the reported net I.R.C. sec. 1231 gain of $5,390,383,
portfolio (interest) income of $381,998, and trade or
business income of $2,266,296. * * * Therefore, the
amount of gross income omitted by * * * [BEP] which was
properly includible therein (i.e. $16,515,194) exceeded
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