Snow v. Commissioner of Internal Revenue

RESPONDENT:Commissioner of Internal Revenue
LOCATION:Robinson’s car during a traffic stop

DOCKET NO.: 73-641
DECIDED BY: Burger Court (1972-1975)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 416 US 500 (1974)
ARGUED: Apr 16, 1974
DECIDED: May 13, 1974

Burgess L. Doan – for petitioners
Stuart A. Smith – for respondent

Facts of the case


Media for Snow v. Commissioner of Internal Revenue

Audio Transcription for Oral Argument – April 16, 1974 in Snow v. Commissioner of Internal Revenue

Audio Transcription for Opinion Announcement – May 13, 1974 in Snow v. Commissioner of Internal Revenue

Warren E. Burger:

The opinion of the Court in 73-641, Snow against the Commissioner of Internal Revenue, will be announced by Mr. Justice Douglas.

William O. Douglas:

This case is here on certiorari for the Court of Appeals for the Sixth Circuit.

Snow, the petitioner, was a limited partner in a partnership formed for purpose of indenting and hopefully marketing various products.

In 1966, in taxable year 1966, he suffered a loss, and at that time the partner who was the inventor was working on an incinerator.

He finally got his patent in 1970 and has been selling it since that time, but in 1966, it was still off in the future, and it was — the fact that this was not a deduction in a business then — selling incinerators then being undertaken in underway that the Tax Court sustained the Commissioner in disallowing the deduction and the Court of Appeals affirmed.

We reverse the Court of Appeals.

The history of Section 174 (a) (1) which allows experimental expenditures which are paid or incurred during the taxable year in connection with the trade or business was put in by Congress in 1954, precisely we think to aid the new long coming struggling pioneers who had not yet produced their business, but were on their way to that end.

That was passed by Congress according to the legislative history to equalize the tax opportunities of the little oncoming business as compared with the established business that had research and development departments all of whose expenses were deductible.

These views are elaborated in an opinion file of the clerk.

Mr. Justice Stewart took no part in its consideration or decision.

Warren E. Burger:

Thank you Mr. Justice Douglas.