Commissioner of Internal Revenue v. Hollywood Baseball Association, Hollywood Baseball Association v. Commissioner of Internal Revenue

This is a petition by the Commissioner of Internal Revenue for review of a decision of the Tax Court reversing the Commissioner’s finding of a deficiency in taxpayer’s returns on one ground; and a cross-petition by taxpayer for review of a decision by the Tax Court sustaining the Commissioner’s finding of a deficiency in taxpayer’s returns on a second ground.

Jurisdiction of the Tax Court was based upon Section 6213(a) of the Internal Revenue Code of 1954 ( 26 U.S.C. § 6213 (a)), which permits a taxpayer who has received a deficiency notice pursuant to 26 U.S.C. § 6212 to petition the Tax Court for a redetermination of the deficiency within ninety days. This court has jurisdiction of the petition and cross-petition to review pursuant to Section 7482 of the Internal Revenue Code of 1954 ( 26 U.S.C. § 7482 ).

The basic facts are not in dispute, though somewhat complicated. We refer to the Tax Court opinion for a detailed explanation of them. 42 T.C. 234 (1964).

The Commissioner states the nature of the controversy in his petition for review as follows:

The taxpayer filed his cross-petition to review a portion of the decision, and states the controversy as follows:

We are…