Rethorst v. Commissioner , 1 B.T.A. 448 ( 1925 )

Appeal of O. W. RETHORST.

Rethorst v. Commissioner

Docket No. 221.

United States Board of Tax Appeals

1 B.T.A. 448; 1925 BTA LEXIS 2923;

January 30, 1925, decided Submitted December 3, 1924.

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Section 213(b)(8) of the Revenue Act of 1918, which provides for a $3,500 exemption for those in the military and naval forces, is repealed by section 1400(a) of the Revenue Act of 1921, as of January 1, 1921, and a soldier is not entitled to exemption for salary received between January 1, 1921, and March 3, 1921, the date on which the World War was declared at an end by Act of Congress.

Mr. O. W. Rethorst, the taxpayer, in his own behalf.

Willis D. Nance, Esq. (Nelson T. Hartson, Solicitor of Internal Revenue) for the Commissioner.

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IVINS

Before IVINS, KORNER, and MARQUETTE.

This appeal was submitted to the Board on a letter received from the taxpayer and the argument of counsel for the Commissioner. From the allegations of the taxpayer admitted by the Commissioner, the Board makes the following

FINDINGS OF FACT.

The taxpayer is an officer of the United States Army. In his income-tax return for 1921 he claimed a deduction of $584.93 on the ground that section 213(b)(8) of the Revenue Act of 1918 provided for a special exemption of $3,500 to military officers for the period of the war. The deduction was disallowed by the Commissioner and a deficiency in tax of $35.10 asserted, from which this appeal was taken.

DECISION.

The determination of the Commissioner is approved.

OPINION.

IVINS: The war was declared terminated by resolution of Congress for certain purposes, including computation of taxes, on March 3, 1921, and the taxpayer thought that since 61 days of 1921 were thus regarded as prior to the termination of the war, he should be entitled to 61/365 of the $3,500 allowance made in the Revenue Act of 1918. But taxes for the year 1921 must be computed under the Revenue Act of 1921 which, for the purpose of computing income, etc., is retroactive to January 1, 1921. Section 1400(a) of the 1921 act specifically repealed Title II of the 1918 act as of January 1, 1921. The exemption relied on having been thus repealed, and there being nothing in the Revenue Act of 1921 to justify any such deduction, the Commissioner was correct in disallowing the taxpayer's claim, and his determination should be approved.