United Mercuty Mines Company, a Corporation v. Commissioner of Internal Revenue

Relying on Oregon Chrome Mines, Inc. v. Comm’r, 9th Cir., 1951, 192 F.2d 783 , the Tax Court of the United States sustained a determination of the Commissioner of Internal Revenue, hereafter commissioner, against United Mercury Mines, Inc., a corporation, hereafter taxpayer, that the claim of taxpayer that it was wholly exempted from payment of excess profits taxes for the year 1944, in the sum of $113,453.68, was invalid. The claim of taxpayer was based upon its belief that it was a “domestic corporation engaged in the mining of * * * tungsten * * * ” within the meaning of 1939 Internal Revenue Code § 731, Revenue Act of 1942, § 226(a), 56 Stat. 798 , 26 U.S.C.A. Excess Profits Taxes, § 731. Recognizing that Oregon Chrome is contrary to the position it takes, taxpayer asserts that the decision reached therein is erroneous and asks us to overrule it. We have reexamined Oregon Chrome Mines, Inc. v. Comm’r in the light of the earnest and forceful argument presented by taxpayer, but are not persuaded that the decision there reached is erroneous.

In addition, there appears in the instant case a crucial situation not present in the Chrome case. It will be noted that the relationship…