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GORDON v. C. I. R.

No. 316, Docket 33772.

424 F.2d 378 (1970)

Irving GORDON and Margaret Gordon, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.

United States Court of Appeals, Second Circuit.

Decided March 16, 1970.

Attorney(s) appearing for the Case

Harry R. Horrow, Stephen J. Martin, Pillsbury, Madison & Sutro, San Francisco, Cal., for petitioners-appellants.

Lee A. Jackson, Gilbert E. Andrews, Attys., Dept. of Justice, Johnnie M. Walters, Asst. Atty. Gen., for respondent-appellee.

Before WATERMAN and ANDERSON, Circuit Judges, and BARTELS, District Judge.

WATERMAN, Circuit Judge:

By this appeal this case reaches our court for the second time. The taxpayers, husband and wife, were minority shareholders in the Pacific Telephone and Telegraph Company (Pacific), 89% of the stock of which was owned by the American Telephone and Telegraph Company (A T & T). Pacific, a California corporation, did business not only in that state but also in Oregon, Washington, and Idaho. In 1961 the management of Pacific decided to simplify...

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