Darrow v. Commissioner

64 T.C. 217 (1975)

From our private database of 46,100+ case briefs, written and edited by humans—never with AI.

Darrow v. Commissioner

United States Tax Court
64 T.C. 217 (1975)

Facts

Kenneth Darrow (plaintiff) and Renee Liddle were each 50 percent shareholders in Rendar Enterprises, Ltd. (Rendar), which derived most of its gross income from rents. In March 1968, Rendar declared a dividend of $2,000 in an attempt to avoid the assessment of a personal-holding-company tax by the Internal Revenue Service (IRS). However, on the advice of Darrow’s accountants, payment of the dividend did not occur until September 1968—after the July 31 end date of the 1968 fiscal year. Rendar paid no other dividends in the 1968 fiscal year. The Commissioner of Internal Revenue (the commissioner) (defendant) assessed a deficiency, determining that Rendar was a personal holding company for the fiscal year 1968, and that payment of a dividend of at least $1,548.52 would have been necessary to avoid that status. Challenging the assessment in federal tax court, Darrow argued that the $2,000 dividend paid in September could be imputed to the fiscal year ending July 31 based on a provision that imputed dividends paid within two and a half months after the end of a tax year to the last day of that tax year.

Rule of Law

Issue

Holding and Reasoning (Forrester, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 745,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 745,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,100 briefs, keyed to 987 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 745,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,100 briefs - keyed to 987 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership