American Chicle Co. v. United States, 316 U.S. 450 (1942)

American Chicle Co. v. United States

No. 913

Argued April 29, 1942
Decided June 1, 1942
316 U.S. 450

CERTIORARI TO THE COURT OF CLAIMS

Syllabus

1. Under § 131(f) of the Revenue Acts of 1936 and 1938, allowing to a domestic corporation, in respect of dividend received from a foreign subsidiary, a tax credit of that proportion of "taxes paid" by the subsidiary which the amount of the dividend bears to the amount of the subsidiary’s "accumulated profits" (i.e., its income less taxes thereon), the word "taxes paid" are properly construed as meaning so much of the subsidiary’s taxes as are attributable to its "accumulated profits," or the same proportion of the total taxes which the accumulated profits bear to the total profits. P. 452.

2. A change by the Commissioner of Internal Revenue in the administrative practice, to conform to the plain meaning of the Revenue Act, and operating prospectively, is not precluded by an antecedent administrative interpretation, though of long standing. P. 454.

94 Ct.Cls. 699, 41 F.Supp. 537, affirmed.

Certiorari, 315 U.S. 793, to review the dismissal of a suit to recover an alleged overpayment of income taxes.