Stephen S. Ziegler - Page 11

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          2057) violated the Due Process Clause because he “specifically              
          and detrimentally relied on the preamendment version”, id. at 33,           
          of that provision when he engaged in a transaction prior to its             
          amendment by Congress.  Id.  In rejecting the taxpayer’s posi-              
          tion, the Supreme Court of the United States observed that the              
               reliance alone is insufficient to establish a constitu-                
               tional violation.  Tax legislation is not a promise,                   
               and a taxpayer has no vested right in the Internal                     
               Revenue Code.  Justice Stone explained in Welch v.                     
               Henry, 305 U.S., at 146-147:                                           
                    “Taxation is neither a penalty imposed on the                     
                    taxpayer nor a liability which he assumes by con-                 
                    tract.  It is but a way of apportioning the cost                  
                    of government among those who in some measure are                 
                    privileged to enjoy its benefits and must bear its                
                    burdens.  Since no citizen enjoys immunity from                   
                    that burden, its retroactive imposition does not                  
                    necessarily infringe due process ....”                            
               Moreover, the detrimental reliance principle is not                    
               limited to retroactive legislation.  An entirely pro-                  
               spective change in the law may disturb the relied-upon                 
               expectations of individuals, but such a change would                   
               not be deemed therefore to be violative of due process.                
          Id. at 33-34.                                                               
               We consider now whether, as petitioner argues, section 469             
          is retroactive.  As pertinent here, section 469(a) applies only             
          to a passive activity loss as defined in section 469(d)(1) for a            
          taxable year that began after December 31, 1986.  See TRA 1986              
          sec. 501(c), 100 Stat. 2241.  Section 469(a) does not apply to              
          any loss for any taxable year that began prior to January 1,                

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