Case and Source Analysis: Gregory v. Helvering

Gregory v. Halvering

Gregory v. Helvering, 55. Ct. 266 (1935)

I accessed the case of Gregory v. Helvering, 55. Ct. 266 (1935) via www.justia.com. Before briefing the said case, it would be prudent to first comment on the authoritative weight of the source.

Justia's Authoritative Weight:

Justia, as the company points out on its website, "provides Internet users with free case law, codes, regulations, legal articles and legal blog and twitterer databases, as well as additional community resources" (Justia, 2013). Its mission, as it further points out, is to ensure that the society benefits from the advancement, as well as availability, of legal resources. Currently, the company's headquarters are located in Mountain View, CI. Essentially, Justia's authoritative weight could be evaluated on three key fronts, i.e. its key partners, top leadership, and reputation.

With regard to its key partners, the company points out that to ensure that the online community has free access to legal information, it partners with "educational, public interest and other socially focused organizations" (Justia, 2013). By dint of working with such organizations, especially educational organizations, Justia can be regarded an authoritative source of legal information.

When it comes to the company's top leadership, it is important to note that two of its topmost leaders are accomplished legal professionals. In addition to being members of the State Bar of California, both the Chief Executive Officer and the President have vast experience in law practice. On this front, one could conclude that Justia has the best legal brains at the helm to advance its agenda.

On its reputation, Justia is regarded an authoritative source of legal information by most independent commentators and experts. For instance, as Elias and the editors of Nolo (2009) point out, "Justia is a very comprehensive, free site…" As they further point out, it has many useful resources that could come in handy for any individual researching various legal cases.

Case Brief:

In this particular case, Mrs. Gregory, who is in this context the taxpayer, was keen on avoiding double taxation. As the owner of the stocks of United Mortgage Corp., an entity that held some stocks at Monitor Securities Corp, she desired to sell Monitor Securities Corp's securities for a significant profit. However, there was a problem. If done as it should have been done, taxation would occur at two levels, i.e. after the sale of Monitor Securities Corp's stocks and again during the distribution of sale profit, as dividend tax. There was a way around this. To minimize her tax obligation, Mrs. Gregory formed a new entity which then issued its shares to her after they were transferred from United Mortgage Corp to the said entity. Next, she dissolved the new company thus causing Monitor Securities Corp's securities to be accorded to her as liquidating dividend -- with the passage of shares being tax free. Next, she offered the stocks of Monitor Securities Corp's for sale and reported capital gains. She then went ahead and asserted that the transfer of stock from United Mortgage Corp to the new entity was tax exempt as per the provisions of the Code. As the Circuit Court of Appeals held at the time, the reorganization that had taken place was not within the statute's meaning. It was for this reason that the Commissioner of Internal Revenue's opinion that the "petitioner was liable for a tax as though the United Corporation had paid her a dividend consisting of the amount realized from the sale of the Monitor shares" was upheld by the Circuit Court of Appeals (Justia, 2013).