CTA Case No. 179 (Decision)

A U.�A . o. � t tion .. -- - -- - - - - - -. ~ ... cl . 0 r f t repr ent n + , X y ,.-- f loilo. c. dut from th Tnt n t o 1 Cl ( re f f rr 0 t 1 )' or of r, er~ 11 ct ll lly rc :tts poat �r id nts, c � f� ~ enuy, na � r su � o. ai r h ..n , 2 �7 � 1, T� n.. ion 1 1 of lo1 , 1 �� i non� proftt , n� tee c r por on or nlz: hi tpp ne i 8 in aryl � n o d X to ro ote th soc:i re t lon s on t e; �r ' 8 0h 0 in one eor y, r p- n�nc�� n � l ecx; al c �n . cl house �. " ' of I c r or - rie, � 2) � In co � t1on �xh. � �� epoaition� a sonance 1th t is avow ~ ose, t � clu ita .lru;or ora !on n l 9 o its c1issol tio t. � 27

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� 17 -� n oxce collec� ...alleged ua tct y, ,.. poatttva o effec �t� � t � n 12, 1 1, J. � � .,. t A ~�sldM lWt, ote the ty rea~ ef IloUo ( ��,.. � pp. . at it .....12-1 � ct rec ), nt t agalil �� iiE.ftlllW'_.. f the .-. . t the Clu.b wa& a prl� ulaecl fu pn tt. lc 1 � the lla olo 1 1 not a. hel l� fft t � - la J.ned ttM th�� tn t � t �� d1aM1 t!JMt 1ft ept � 19&1 ,.., 1 � ........ Januazy 1 � 1902 (& � 6 6&, 'A l'ecoJ:'d). .. ze �~�� � � 13, ) llectu d led pet1tl0fte J. � ~.., 1 the latta' pay!aent of the u uat 1 polttlve � eps to ozce collectlo of the all eel taa uf~lency. AUV\IIt :15, 1 53 ( xb. t..,_ zo�eri) ancl 15, 1 53 ( Jlh� �7"� P� � .....e) � H~eftt. UJ:g.-l tbtt 1 y n.u. f l .al of 0 p.HhCute crt..tnally th� paat "idet� o the lul> fOI' violation o MOtlona 182, 29 4o

� 17 - ... ... 18 and 1 l o t x od � an le, etit!o ers ~� eat re o t � t' o s!dera'tio . of their c���� ~11� an ~12� . P. � 6 , ~ , rec~d}. t e lost c to of ~� pon t , t e 1 1 lteal eon<iutt ' y 1nv st1 et1o o th c���� � or tion ga!nst - U5t � l 0 { xh. 8 t P� 64, t� ity nasurer of 1- ties t e.a J. 0 th� sa e ug t 3, 1 9 (E� � ' ftJ h co nt 1 f l~d t ! r ~ltt n e l 1m o~ nt of t for o nta� pad y rot st. ct !v ny re:ply frc."ll r nt s~ d cl � f n, petition r thru counael s nt y r st r .. 1.1. 0 th1� Co at 'their petit on for h ch a � c tved y th Court on gust 27, 1 ~~ . 1 is u a ~1 h c ll p to r $olv y � u .rize t s ; (1) u o -c Jur ad ct!on to or d tt t e r f nd of h 1 y p~ttt.oners h r tn? (2) t Int rn t i on l 1 of ll'lilo l i . le for ent of ., h fixed ana pu� c enta t~xes o ~h to r� it? ( In the a�firi a i ve, e peti 1on-.rs eretn lia 1 or 30 ~7

- . � 17 � pa,._t of tb� af~eaa!d tax liabUlt~ � fUat l�au�� H o.....,t c t � that this t has no jl.lriMf.Ctlon t ozct. th� t-efuod of th.e 11110\&Dt� palcl y p�tltlon�� h��ln o.cau.. firtt , tM -.ount� sou ht y ~M~'t1tione� :to N ref n w1 � ~ld ~y t � 1n extrajucllclal M tl..nt of th� ~���� agatnat 100 � pttlttonas ve cauae of ac~ioft � n tM atant caM c.nsl e tbat thee ls �� .,. cleolal 011 th�ta- x-equeat for~ tand. � cu not hC~ibe to *'Y of th. . . U"gUMnta acWMCM y :&". .MtlliCI1 � lieve that thAt IIDOU.ftta paid. y petltiones hu�ln of thetz alleged tax U llity 1d Mt con- tit te "comp 1..� pa 1 t. by Met!� of ~ � ational tnternal a.v.nue Code. .vi._.� It. 1� clear fr t � .,._Itt_., that 1�� xbJ.Dlt� � , �a allCl ��� , that petttlone� pata thell" alleged iai lluUltl" u te t on Au uat 3. 19~5. � an.& on the . . . clat� fUed � � i t t � cla.t. fu reht of the t paid �� eYlcMnc-' y ��r��� .. xblbtt � � lt can not be ..1d th-.fue th t tbue has Men� any 1��lon. or JJIPli , on the put ef petltlOftU's boldJng th....lv�� 11ule f � the ba�k tax llabU ty. If there bea been any ~c ~tae� pa~t � all wlt.hln the purv1� of uctloft of the ax �----, lt can �nn fna the evldena� Oft hancl the said �cOIIIIpa'oaai. .� pa,...-at. con�J.�t.ed of t.M -.unt of 31

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� 179 ~ 7- ~ � Ltd. , v�. avt � �� C ll.et f nt Court h � con� ven � � 49 o. � � &, p. J. ~~). slatently adhu to thla ectr n d by h upr_. ~ ( .... Coll e of ~ 1 e vs_. C.llec:te of I ernal �� .aa:~u 19, 1 HJ ParN�l-RH'III�u� COftsol at n!n � .-. Uec or o Internal nenu , c.. r. " at 22, 1 ~J and h lf. n ron �, � vs. llecttc of I tunal ev u�� � . A. 294, 9, 19S6). :.ta the �tent c: ��� find th t t�tton � le t to at\ICly th r case. � reco ow that �� ~ly �� reb 12, 1 ~1 et!tlon~� dld ln ltlag !felt their 1.. hat t � 1 b ��� net 11a le fR ~h ta... ht to be ce lect (p. � Ii\ .HC_..,). � contentleA � � J"etteated n. a letter 1 counMl f ttt t Oft_... to the ty 1scal o Jloll d�t ept u l , l 9t)3 (p. 27, I'�Mcl) wb!ch �� f -' te zoe erlt fn co:~ !de.r1tt; n ncel ., th latt on -., , a. { xhl� 1\ �6 , I'.Col'd). Thu � ftv c.aatci�at of the � %e oadent a lett~ o the ity iacal o Iloilo dated to er 1~. 1 � "7 , p. , J'ec ) stat-a that the �� liaole f� the flaed and percent� � taxes gh\ to � col ect :t__.. thla . -, rec ended the crlalnal pnsecution o ,.tlttenen for vlolatJ.ena of uc ions 112 and 18 " eptlllb4tr 23, 1 titloners 33

� 17 -- ote � h r l� t ( � � � p� 45� Z' ord) r u �1 Iloilo 1n i i � 0 lcl he 11 (p. 47. ~r~o � in9t - c c pt t ). � . . s ing or � n fv t aft 1 t X1 re t oil ~tor h s not ec lelon nc � contid�rt t �c i t ld li 1� � t ext nt of pt � ti ners. Whl e th n.ciout a P� !o t 'tO contl er pe to a 1 n t1 0 co 1z c s. oc r o nt l � 11� 1 ri s' nterna al of I l ilo, ne. 11 perc I e t xes & tor of 1 exi tnc '} 3 !l 3~

� 179 -- r� l 1 ... � � t c.. 1 1. - � - � f � n tlc � r. ... nd 1 1 th d nly 1 .. 35 2. 18 0 d Of

� 119 - - � ... JJU.rPO��� . l idea. 1� at July 31 . tly. any penon � eftt -ty not en- tlvii.les �� f. l� � �f th and �� of the ~..... ~0 to conauu..:l. ainat he ln faYft of tM taxpaJU.J iC ondent cit�� t � ex tlont fou d ln MC� :th��� u. � only exempt! s to the taxes lll ... 1� th � view ftOt 11 U. � tleaa tn MCt1ona 182 and 191 o the x � u 36

� 179 - 11 - ( 1 sS.ve t ey cove~ pu � .. tn auas.ne � �nCi � bo oth to pay tb� f .._.. 1 no fo%" .uch � tlon � The a.c1a1ve feet 1ft tbla c���� 1c Mter- lnea the l ialtility o be Int.a-Mt10Ml ..l'ib of Il�llo :to pay t.be 1 eece � �- �� ..,..., � � 1� __I..,_ - ,.,. lt 1� � ed in he eu.e.a� �� opcate � � � baY� al� a-e y hi c1 that tht plaln � sln..a lt ,....utctecl to ect1v1t � � � aU. . . PrOJl 1� IMaatDe�a� ..- uud w1th- tlv.. and ., � t eu any alifi&atlo J.ta platA aACI oH!Aizoy ---�---., 'tlvl tea or � 61 � ~h� .........- , � Th1 COAS �-�- �lth the aUAdUd .. oy ,_.1.. haa the ch.ncte o a lt ta for t.h� ~��� of gain . . . eople ~. u.....t1el4l, hU. 367). 1\h this baaic cone a len 1ft , we shall now tbar the Cl � �� f *ll� M tlon lef ��1n._e, eat�t� lA � atMea� �� an en a ber. It la unoont.s-o ..t tba the lntanatlonai 1 of Iloilo, lnG. waa a stock c~ation antaed not f~ atn��� to . . .,. t �ath.le- 37

� 17 .. 12 ... tc t.o ht�.,.. it lD �tn .. etn 11 � and llght nfi'Mb..,.ts..,... .... solei ��luatvely te u ��'� wtth jtla ~&a t� cne uathnel ..ld.tb f . me " ita y � ftU' pro- f1te "" lv f~t.M atton of fl't �� yo 1 � t��� ~lQ� ~ &b ...t. the .lWJ � ef !t� lt.Mlutloft -.vl 1ty . ., ( � . lua ( p. .- the f inanelal �tat ,.. Ncl) lt is ...-ent that a 1M of the aa.t Het ant a c etlftlf nry 11 tble 1th t .,_atl.ul �.,.... of tiM Cl tMt� 1M 11fet �f tM lu it attMI at a lo���� uncle' tbHe c!n , . . . .. we ~� 1 � tlw n ena teul lub �f ll�U�� Inc_. �� encn�aild lrl th� � atnea � of :a&41U!' \lnCture, w �t� f~ � c�� Of � � 761 �f Ute , B!K� Whlcb tanda f ~q"1J wltb the caM at �xt has ..t��lta wlthtut con- uldlct1 til*' t.M Ua IU.k� Clult, 1a, p-e.caaluaelnccle.,e.,f .. - p...., ...a .it.a11pa u� pon"t �� � f t at. ,..l all at lta cluJt.ot 1~. ~tc1a-le�, c1 11..-. t u.tt.., . ..- a y lf.ldtecl ��t�. only t t� v ut � t �u ~~~: eover aeer � 38 3;

� 119 �1 � t1oaa.l ..,. �� wt lntentlen to o tala p:nft � uch tnt :th� ea" then, the Ua lk� Club ct n' bMuatJ.a��c�o' no�fi� � u g��1lq uau ancltnt t -.ceo ..Uln ... the COZ'POI.'Itl.c\ ...,,....,. ney txc t euch :aa � � .nc:staoctt.d.n.o.b-us~~�~�~�-~a-r-liMlt.. we � c.-pOJ'at!on l� con�14�ed aot J.aecl for pnfit u,__ ttHt '"--- 1 Cezpftatlen Law. � ( ea4 �� wat.- CNl b. 1 116 A cttecl 1n Vol. M, ..as ... � ftft 'J>Hf1tl1 J .......:o- MR!ng ~CW1cl �) 1 � .�t �tnlvtte-avw� t.u�tn, 11� lka !1ft t ���� of ,.., th��f�� J Mll at r.ta!l l' lqu� _. taecce, can- helcl liable f� the pzo!Yl- lege :tax�� egull'tci -.ctJ.on 19 � su lcK- tt.� (1) , (k) aftd (ft � The" tht of eican aw hw t.l� enb �� ~ f1 JA � that a Httlrftal, ct�!c, ...,.... eck, ,.._ ,_..fl ~aa1ut.l�� l!.U tlke lka lY � . .llJAg at Htail 11CJI� -.co Oftly to 1 1 � Mel tMlz' eats 1n PUI'� ....,.. with tts g__..l pupoM �� � -.clal f~at.,..l clwb with Just entMl�lh muv!il to ce~ operational costa, 1~ ~t be held �W.� l!Qle f� tile fl Uua lciMt to tb of telling n ~�t�U, 1 � and :t ��� � M id.a aoctal 1 � w 1G cltepoM� of 11..-1 a tl ~MI � p�e~ ..� a o� � ant t .b�h �� ta~t �a lff.~ � !ncld .t.a net ...- utiata�t itohne th� �lnfl te take .at � itc�M ., � �1LewI�, � lch777� 3w1l8t1le, a~f���a llcenMh lei, upen. � etnesa of diii)Oa!AQ lnt.- x!cat.l ll �J til� w s t n. .a 1A �tatute lng buaf.n �� 1n U.. b'U. or CJ r ,_.tal ._... � ( tate v. nl~�1ty lub, 1 � 4 , 4lOJ "'� 47&). �A ..ctal clo net. wg !hill � � , ..... ., e�MJ"i the 11 1��� t lch f z-elfsnhsh"Mtetnst��w�l�~�tW�iot hf l t ltquOH and to lt..lf. 1a Mt � .a-�t�U 11..- deale, ith.ln t.b �tatut� a licenee 39

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�I - 1~ - tc vol I l y t r n..o y t �� t� fr h eor � ( c or t th cor do 't t pt c � t t n1 y tat lt in t on of � of tho 1 t ..pl "'t d p 0 cuti c:z t JlC', 1 � � it it � r r th lity c . t. t Cl n, p ti '..<: tt r n est 0 � of t Y uC d. 41

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