283 U.S. 15 (1931), 87, Milliken v. United States

Docket Nº:No. 87
Citation:283 U.S. 15, 51 S.Ct. 324, 75 L.Ed. 809
Party Name:Milliken v. United States
Case Date:March 02, 1931
Court:United States Supreme Court

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283 U.S. 15 (1931)

51 S.Ct. 324, 75 L.Ed. 809



United States

No. 87

United States Supreme Court

March 2, 1931

Argued January 29, 1931



1. A finding by the Commissioner of Internal Revenue, in assessing an estate tax, that a gift made by the decedent in his lifetime was made in contemplation of death is controlling when the tax is called in question, if not challenged by any fact appearing of record. P. 19.

2. The Revenue Act of 1918, § 402, applies to gifts in contemplation of death made before its passage. P. 19.

3. The inclusion of gifts made in contemplation of death in a single class with decedents' estates to secure equality of taxation, and prevent evasion of estate taxes, is a permissible classification of an appropriate subject of taxation. P. 20.

4. A tax is not necessarily and certainly arbitrary because retroactively applied, but may be justified and upheld in such application because of the particular circumstances. P. 21.

5. A gift in contemplation of death was made while the 1916 Revenue Act was in force; the donor died after the effective date of the Act of 1918; in assessing his estate for transfer tax, the value of the gift at the time of his death was included, and the tax on the whole was levied at the rates of the 1918 Act, which were higher than those of the Act of 1916. Held that the application of the later rates, as respects the gift, was not unreasonable or unconstitutional in view of the relations of such gifts to transfers by death and the legislative policy of both Acts concerning them, established before the gift was made. P. 20.

6. The application of the higher rate of the 1918 Act to gifts made in contemplation of death while the 1916 Act was in force does not destroy the character of the tax as one on privileges, and so render it unconstitutional as an unapportioned direct tax. P. 24.

69 Ct.Cls. 231, 38 F.2d 381, affirmed.

Certiorari, 282 U.S. 817, to review a judgment denying recovery of a tax.

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STONE, J., lead opinion

MR. JUSTICE STONE delivered the opinion of the Court.

In this case, certiorari was granted, 282 U.S. 817, to review a judgment of the Court of Claims denying to petitioners recovery of a tax alleged to have been illegally exacted under the decedents' estates provisions of the Revenue Act of 1918. 38 F.2d 381; Act of February 24, 1919, c. 18, 40 Stat. 1057, 1096, 1097, 1149, 1150.

In December, 1916, while the Revenue Act of that year was in force (Act of Sept. 8, 1916, c. 463, 39 Stat. 756, 777), petitioners' decedent gave to his children certain shares of corporate stock. The donor died March 5, 1920,

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after the effective date of the 1918 Act. The Commissioner included the shares of stock in the decedent's estate as a gift made in contemplation of death, § 402(c) of the 1918 Act, and assessed and collected the tax now in suit, which was computed on the basis of the value of the stock at the time of decedent's death, and at the rates in the 1918 Act, which were higher than those fixed by the corresponding provisions of the Act of 1916.

Section 401 of the 1918 Act imposed taxes at specified rates upon transfers of estates by decedents. Under § 403, the taxable estate was the "gross estate" less enumerated deductions. Section 402 provided for the inclusion in the gross estate of the value of property

(c) To the extent of any interest therein of which the decedent has at any time made a transfer, or with respect to which he has at any time created a trust, in contemplation of or intended to take effect in possession or enjoyment at or after his death (whether such transfer or trust is made or created before or after the passage of this Act). . . .

The Revenue Act of 1916, §§ 201, 202(b), which had contained similar provisions for [51 S.Ct. 326] the taxing of...

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