Baumgartner v. COMMISSIONER OF INTERNAL REVENUE
| Decision Date | 11 December 1930 |
| Docket Number | Docket No. 24828. |
| Citation | 21 BTA 623 |
| Parties | LULU VANCE BAUMGARTNER, TRANSFEREE, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. |
| Court | U.S. Board of Tax Appeals |
Walter C. Fox, Jr., Esq., for the petitioner.
Frank T. Horner, Esq., J. E. Mather, Esq., and H. B. Hunt, Esq., for the respondent.
The respondent determined a deficiency in estate tax of $5,297.38 which he proposes for assessment as a liability against the petitioner as a transferee of property of the decedent, A. C. Baumgartner.
The numerous issues raised by the petitioner's assignments of error may be grouped into the following general classifications:
1. The validity of section 316 of the Revenue Act of 1926.
2. Is the whole value of the community property to be included in the gross estate?
3. What is the effect of the part allowance on February 18, 1925, by the respondent of the claim in abatement filed in behalf of decedent's estate?
4. Is the proposed assessment barred by the statute of limitations?
5. Is recovery against the petitioner precluded by reason of the fact that she is not the sole transferee or beneficiary?
The case is submitted on the pleadings and stipulations.
FINDINGS OF FACT.
The petitioner is a resident of Oakland, Calif., and the widow and duly qualified and acting executrix of the last will and testament of A. C. Baumgartner, who died August 1, 1921. On April 20, 1922, the petitioner as such executrix filed a Federal estate-tax return and reported therein that one-half of all the property described in same was community property of petitioner, exempt from estate tax, and that the net estate of the decedent subject to estate tax was $112,888.38, on which the estate tax, $1,757.77, was paid.
On March 12, 1923, the respondent notified petitioner in writing that a redetermination of tax due from said estate had been made and that the net estate had been determined by him to have a value of $294,179.35, inclusive of all of said community property, and that an additional tax of $5,509.40 was assessed against said estate, of which the sum of $194.02 was assessed by reason of his increasing the appraised value of said estate and the balance, $5,315.38, was assessed by reason of the inclusion as a part of the net estate of said decedent of said community property of petitioner.
The petitioner paid the $194.02, but in behalf of said estate filed a claim in abatement against said assessment in the sum of $5,325.38, upon the ground that the community property of the petitioner was not subject to Federal estate tax.
On February 18, 1925, the claim in abatement to the amount of $5,297.38 was allowed. The rejected portion was paid on March 30, 1925.
Under and by virtue of decedent's will, one James Vance received a legacy in the sum of $5,000, the petitioner as a legatee and devisee receiving the residue of the assets of the decedent's estate, the value of which distributed to her on December 27, 1922, was in excess of the amount, with interest, proposed for assessment as a liability against the petitioner. All known assets of decedent's estate were distributed as stated and none have since been shown to exist, though the estate is kept open so that in the event further property is found it might be distributed without further probate proceedings.
All the facts essential to a full, fair and final determination of the estate-tax liability under the Revenue Act of 1918 of said estate, or said executrix and petitioner, were before the respondent prior to and at the time he allowed said claim in abatement, and prior to the receipt of the letter mailed January 14, 1927, petitioner had no notice of respondent's intention to change his prior ruling upon said claim in abatement and make the proposed assessment against her as a transferee of property of decedent.
The issues are considered in the order heretofore stated.
1. The petitioner raises the question of the constitutionality of section 316 of the Revenue Act of 1926, which section is substantially the same in form and purpose as section 280 of the same act, both sections providing means for the enforcement of liabilities of "transferees." We have repeatedly held that where a petitioner appeals to this Board under section 280 the validity of said section may not be questioned in such proceeding. Henry Cappellini et al., 14 B. T. A. 1269, and subsequent approving decisions. We hold the same ruling is applicable to said section 316. Phillips v. Commissioner, 42 Fed. (2d) 177; 282 U. S. 828; and Routzahn v. Tyroler, 36 Fed. (2d) 208; certiorari denied, 281 U. S. 734.
2. Although the petitioner questions the correctness of the respondent's action in including the whole value of the community property in the decedent's gross estate, she concedes the decisions of this Board are against her contention and there is therefore no necessity for any discussion of the subject. See Talcott v. United States, 23 Fed. (2d) 897; certiorari denied, 277 U. S. 604; and Henshaw v. Commissioner, 31 Fed. (2d) 946; affirming 12 B. T. A. 1441.
3. On February 18, 1925, the respondent allowed, in part, the claim for abatement filed by the petitioner as executrix and her insistence in effect is that such decision or allowance is final and can not be reconsidered and reopened by the respondent. Such contention is not sound. There is no evidence that any final closing agreement under any of the revenue acts was entered into between the petitioner as executrix or otherwise and the respondent, in the absence of which we are of the opinion that the respondent was not estopped from reopening the case and making a redetermination of the estate tax within the statutory period. McIlhenny v. Commissioner, 39 Fed. (2d) 356, and authorities therein cited; Eleanor Jane Zeile, Executrix, 20 B. T. A. 1039. See also James Couzens, 11 B. T. A. 1040.
4. The decedent died August 1, 1921, and the tax on his estate was due August 1, 1922. (Sec. 406, Revenue Act of 1918.) Four years were allowed for the assessment of additional taxes, or until August 1, 1926. (Sec. 1322, Revenue Act of 1921.) The assessment of tax against the decedent's estate was timely made on March 12, 1923. The period for assessment against the decedent's estate or the executrix thereof did not expire, however, until after the passage of the Revenue Act of February 26, 1926. The assessment would, therefore, fall within the retroactive provisions of section 311 of that act.
Assessment and collection against the executrix or the estate of decedent not being barred before the Revenue Act of 1926 was passed, this proceeding against the transferee petitioner is not barred. Such being the case, section 316 (b) (1) of said act contains the applicable limitation in reference to assessment of the liability of the transferee petitioner, which is "within one year after the expiration of the...
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