Memorandum of Disapproval of Bill for the Relief of the Estate of Mrs. Frank C. Gregg.

I AM WITHHOLDING my approval from H. R. 1829, "for the relief of the estate of Mrs. Frank C. Gregg."

The effect of this bill would be to accord to the beneficiary a form of tax treatment that Mrs. Gregg, as a stockholder in a corporation liquidated pursuant to a plan of complete liquidation, might have elected to receive. Such election, under existing law, must be made by four fifths of the corporation's voting stock interest within 30 days after adoption of the liquidation plan. Mrs. Gregg, who held less than a four-fifths voting stock interest, did not make an election within the specified 30 day period.

In support of this claim for special relief, the taxpayer's representative relies upon the fact that he was unable to obtain certain forms prescribed for making the election. It appears, however, that a letter notifying the Commissioner of the unavailability of such forms and the desire to make an election would have been sufficient.

The taxpayer's representative also relies upon the fact that Mrs. Gregg became seriously ill 25 days after the adoption of the plan of liquidation. A timely election was not made, however, by any of the other shareholders in the corporation who would also have had to have made such an election for Mrs. Gregg, or any of them, to have received the tax treatment in question. Mrs. Gregg's sickness had no bearing upon their failure to do so. Accordingly, even if she had made a timely election, Mrs. Gregg would not have been entitled to the tax treatment this bill would now accord her estate.

This legislation would, therefore, confer benefits on Mrs. Gregg's estate which none of the other shareholders in the corporation are entitled by law to receive.

Because such special relief would constitute an inequitable discrimination against other taxpayers similarly situated, I am constrained to withhold my approval from the bill.

DWIGHT D. EISENHOWER