Opinion of the Court. 381 U.S. the meaning of § 117 (f). There was no explicit consideration of whether any discount element in the amount realized by the taxpayer on the certificate was to be taxed as ordinary income or as capital gain. It is at best highly questionable, therefore, that by acquiescing in this decision the Commissioner conceded that § 117 (f) extended capital gains treatment to the discount element in the certificate of indebtedness.10 As to item second: the petitioners were not warranted in reading Caulkins as holding that the gain realized on a sale that is attributable to original issue discount is to be given the same tax treatment as gain so attributable realized on a retirement. The opinion deals only with, and rests squarely upon, § 117 (f), which is concerned with retirements. It is true that, in the case of securities in registered form or with coupons attached, that section was added by the Revenue Act of 1934, 48 Stat. 680, 714-715, to eliminate a difference in treatment between sales and retirements. See, e. g., Fairbanks v. United States, 306 U. S. 436; Watson v. Commissioner, 27 B. T. A. 463. But the opinion in Caulkins appears erroneously to carry forward a distinction and to give more favorable treatment to retirements. See United States v. Midland-Ross Corp., supra, at 63-66. Thus petitioners should not have read Caulkins as they did. Indeed the Tax Court has since distinguished Caulkins on the ground that it rested on the § 117 (f) language of 10 The opinion of the Court of Appeals stated that § 117 (f) required that all gain realized upon retirement of an obligation to which. the section applied be given capital gains treatment: that court's primary concern, however, was also with the question whether the section applied to the Caulkins certificates. Technically, the Commissioner's acquiescence in Caulkins was in the Tax Court decision and not in the decision of the Court of Appeals. As a general matter, the Commissioner still follows the practice of noting his acquiescence or nonacquiescence only in Tax Court decisions. 68 Opinion of the Court. retirement and consequently was inapplicable to a sale. See Paine v. Commissioner, 23 T. C. 391, 401, rev'd on other grounds, 236 F. 2d 398 (C. A. 8th Cir.); United States v. Midland-Ross Corp., supra, at 65. Furthermore, even on the assumption that Caulkins may be read as petitioners contend, petitioners had the burden of demonstrating that Accumulative Installment Certificates could not rationally be distinguished from other discounted securities. Cf. American State Bank v. United States, 279 F. 2d 585, 589-590 (C. A. 7th Cir.); Schwartz v. Commissioner, 40 T. C. 191, 193. But the record is devoid of any evidence of effort by petitioners to discharge this burden by showing the absence of any significant difference between the holders of Accumulative Installment Certificates and themselves. Indeed, the Commissioner might well have believed that however mistaken the view that his acquiescence in Caulkins was tantamount to an acceptance of capital gains treatment for original issue discount, the assumption that such treatment would be given the discount element of their debt securities was more understandable in the case of holders of Accumulative Installment Certificates the same obligations as were involved in Caulkins-than in the case of other taxpayers. So thinking, the Commissioner might further have concluded that equitable considerations pointed to making an exception to the retroactive application of the nonacquiescence for the holders of these Certificates. It is not for us to pass upon the wisdom of any such distinction. It suffices that on this record we cannot say that the distinction was so devoid of rational basis that we must now overturn the Commissioner's judgment. Insofar as petitioners' arguments question the policy of empowering the Commissioner to correct mistakes of law retroactively when a taxpayer acts to his detriment in reliance upon the Commissioner's acquiescence in an Opinion of the Court. 381 U.S. erroneous Tax Court decision," their arguments are more appropriately addressed to Congress. Congress has seen fit to allow the Commissioner to correct mistakes of law, and in § 7805 (b) has given him a large measure of discretion in determining when to apply his corrections retroactively. In the circumstances of this case we cannot say that this discretion was abused. Affirmed. 11 Cf. Griswold, A Summary of the Regulations Problem, 54 Harv. L. Rev. 398, 411-419 (1941). Syllabus.. SIMONS v. MIAMI BEACH FIRST NATIONAL BANK, EXECUTOR. ERTIORARI TO THE DISTRICT COURT OF APPEAL OF FLORIDA, THIRD DISTRICT. No. 363. Argued March 10, 1965.-Decided May 3, 1965. Petitioner and her husband, Simons, were legally separated in New York, where they were domiciled, and he was ordered by the separation decree to make monthly alimony payments. He ultimately moved to Florida, where a year later he secured a divorce. Petitioner had valid constructive notice of the divorce action but entered no appearance. Simons made the monthly payments under the New York decree up to his death about eight years after the divorce. Petitioner claimed dower under Florida law when respondent, executor, offered Simons' will for probate. Respondent opposed the claim on the ground that because of the divorce petitioner was not Simons' wife when he died. Petitioner then brought this action in a Florida court seeking a declaration that the divorce had not destroyed her dower claim. The trial court's dismissal of the action was affirmed on appeal and the state supreme court declined review. Held: 1. The denial of petitioner's dower by the Florida courts did not violate the Full Faith and Credit Clause of the Constitution, since the New York decree, which was fully complied with by Simons, preserved no dower rights in his property. P. 84. 2. Any dower rights petitioner may have had in Simons' estate under Florida law did not survive the divorce decree, since under Florida law dower rights in Florida property are inchoate, and are extinguished by a divorce decree predicated upon constructive service. P. 85. 157 So. 2d 199, affirmed. Robert C. Ward argued the cause for petitioner. On the brief was William Gresham Ward. Marion E. Sibley argued the cause for respondent. With him on the brief was Irving B. Levenson. Opinion of the Court. 381 U.S. MR. JUSTICE BRENNAN delivered the opinion of the Court. The question to be decided in this case is whether a husband's valid Florida divorce, obtained in a proceeding wherein his nonresident wife was served by publication only and did not make a personal appearance, unconstitutionally extinguished her dower right in his Florida estate. The petitioner and Sol Simons were domiciled in New York when, in 1946, she obtained a New York separation decree that included an award of monthly alimony. Sol Simons moved to Florida in 1951 and, a year later, obtained there a divorce in an action of which petitioner had valid constructive notice but in which she did not enter a personal appearance. After Sol Simons' death in Florida in 1960, respondent, the executor of his estate, offered his will for probate in the Probate Court of Dade County, Florida. Petitioner appeared in the proceeding and filed an election to take dower under Florida law, rather than have her rights in the estate governed by the terms of the will, which made no provision for her. The respondent opposed the dower claim, asserting that since Sol Simons 1 Petitioner was served by publication while still living in New York and received copies of the order for publication and the divorce complaint. She did not enter an appearance in the Florida proceeding on advice of counsel. 221 Fla. Stat. Ann. 1964, § 731.34 provides as follows: "Whenever the widow of any decedent shall not be satisfied with the portion of the estate of her husband to which she is entitled under the law of descent and distribution or under the will of her husband, or both, she may elect in the manner provided by law to take dower, which dower shall be one third in fee simple of the real property which was owned by her husband at the time of his death or which he had before conveyed, whereof she had not relinquished her right of dower as provided by law, and one third part absolutely of the personal property owned by her husband at the time of his death....” |