309 U.S. 304 (1940), 462, Germantown Trust Co. v. Commissioner

Docket Nº:No. 462
Citation:309 U.S. 304, 60 S.Ct. 566, 84 L.Ed. 770
Party Name:Germantown Trust Co. v. Commissioner
Case Date:February 26, 1940
Court:United States Supreme Court
 
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Page 304

309 U.S. 304 (1940)

60 S.Ct. 566, 84 L.Ed. 770

Germantown Trust Co.

v.

Commissioner

No. 462

United States Supreme Court

Feb. 26, 1940

Argued February 8, 1940

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE THIRD CIRCUIT

Syllabus

A trust company, which held and administered a fund enabling its patrons to invest small amounts in securities, filed with a collector for the district where it conducted its business a fiduciary return setting forth the gross income of the fund, deductions, net income, etc. -- all the information necessary to the calculation of any tax that might be due -- and attached a list of the beneficiaries of the fund and their shares of the income. The beneficiaries included these shares in their individual returns. The Commissioner made an additional return for the fund and assessed a deficiency which the Board of Tax Appeals set aside as too late.

Held:

1. The venue for review was in the circuit in which the fiduciary return was filed. Rev.Act, 1926, § 1002(a), as amended by the Rev.Act, 1932, § 519. P. 308.

2. The assessment was barred under the Rev.Act, 1932, § 276(a), two years after the fiduciary return was filed. P. 309.

3. Sec. 275(c), providing a four-year limitation if a corporation makes "no return of the tax imposed," and § 276(a), providing that, in case of failure to file a return, the tax may be assessed "at any time," are inapplicable. P. 309.

106 F.2d 139 reversed.

Certiorari, 308 U.S. 544, to review a judgment which reversed a decision of the Board of Tax Appeals holding an income tax assessment barred by limitations.

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ROBERTS, J., lead opinion

MR. JUSTICE ROBERTS delivered the opinion of the Court.

This case involves the construction and application of provisions of the Revenue Act of 1926, as amended by that of 1934, and of the Revenue Act of 1932, relating to the venue of proceedings to review a decision of the Board of Tax Appeals and setting limitations upon the assessment of income tax.

[60 S.Ct. 567] The petitioner is a trust company, doing a general business as such, including administering trust estates and acting as agent for the custody, handling, and management of its clients' investments. In 1930, it created, by an appropriate instrument, a fund to afford those for whom it acted the advantage of investing small amounts in securities at minimum expense and with opportunity of ready liquidation. The fund has since been managed according to the terms of the agreement. In the course of administration, the petitioner has paid to the participants their respective shares of income from the invested principal, and has filed fiduciary returns of income on Treasury Form 1041, intended for use by trustees.

March 15, 1933, the petitioner, as trustee, filed such a return, for the calendar year 1932, with the Collector of Internal Revenue for the First District of Pennsylvania at Philadelphia. The return accurately set forth the gross income, the deductions, and the net income -- in short, all information necessary to the calculation of any tax which might be due -- and attached a list of the beneficiaries of the fund, and their shares of the income. No corporation income tax return was filed on Treasury Form 1120. The participants in the fund, who were required to make individual returns for the year 1932, included in their respective returns, filed on or before March 15, 1933, their shares of income.

September 17, 1936, pursuant to the recommendation of a treasury agent that the fund be taxed as a corporation,1

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the respondent...

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