## Facts

- The Commissioner of Internal Revenue determined a federal income tax deficiency against Lawrence, an individual taxpayer, for specified tax years.
- Lawrence petitioned the United States Tax Court for redetermination of the deficiency.
- The dispute included substantive federal tax treatment of certain income and/or deduction items.
- Lawrence argued that appellate precedent contrary to the Tax Court’s interpretive view should control the outcome.
- The Tax Court considered its institutional role as a nationwide tribunal responsible for uniform application of federal tax law.

## Issues

1. Whether the Commissioner’s deficiency determination was correct under the Internal Revenue Code and applicable regulations based on the taxpayer’s challenged income/deduction items.
2. Whether, in a case appealable to a particular court of appeals, the Tax Court is required to follow that circuit’s conflicting precedent rather than apply the Tax Court’s own interpretation of federal tax law.

## Decision

- The Tax Court entered decision for the Commissioner, sustaining the deficiency in substantial part.
- The court declined to treat conflicting court of appeals precedent as automatically binding merely because the case would be appealable to that circuit.
- The court stated it would give respectful consideration to appellate decisions but would decide according to its own best judgment unless constrained by controlling Supreme Court authority or law-of-the-case principles.

## Legal Principles

- The Tax Court characterized itself as a court of nationwide jurisdiction intended to secure uniform and equitable application of federal tax laws.
- The Tax Court may follow its own interpretation of the Internal Revenue Code despite conflicting court of appeals decisions, while giving those decisions serious and respectful consideration.
- Binding constraints on the Tax Court’s interpretive freedom include controlling Supreme Court precedent and situations governed by law of the case (including mandate-type constraints involving the same taxpayer and years).
- Uniform administration of federal tax law was treated as a reason to resist circuit-by-circuit divergence in Tax Court decision-making.

## Conclusion

The Tax Court upheld the Commissioner’s deficiency determination and articulated a pre-Golsen approach to precedent: absent controlling Supreme Court authority or law-of-the-case constraints, it would apply its own interpretation of federal tax law rather than automatically conform to conflicting circuit precedent.


Lawrence v. Commissioner, 27 T.C. 713 (1957)