Edwards v. Slocum
| Decision Date | 18 February 1924 |
| Docket Number | No. 276,276 |
| Citation | 44 S.Ct. 293,264 U.S. 61,68 L.Ed. 564 |
| Parties | EDWARDS, Formerly Collector of lnternal Revenue, v. SLOCUM et al |
| Court | U.S. Supreme Court |
The Attorney General and Mr. Alfred A. Wheat, of New York City, for petitioner.
Mr. Robert Thorne, of New York City, for respondents.
This is a suit brought by the respondents, executors of the will of Mrs. Sage, to recover the amount of a tax paid under protest. The tax was levied under the act of February 24, 1919, c. 18, § 401, 40 Stat. 1057, 1096 (Comp. St. Ann. Supp. 1919, § 6336 3/4 b) which imposes upon 'the transfer of the net estate of every decedent dying after the passage of this Act' taxes equal to specified percentages of the net estate determined as provided in section 403 (section 6336 3/4 d). Mrs. Sage left an estate of $49,129,256.99. She bequeathed specified sums amounting to $1,285,000 for charitable purposes, $8,618,079.55 for purposes other than charitable, and the residue to charitable and educational institutions named. It is admitted that in estimating the tax now in question there is to be deducted from the gross estate the sum of $3,789,321.74 for debts and expenses and the charitable gifts of $1,285,000. These with the gifts to individuals above stated would leave a residue of $35,436,855.70, which the executors contend is exempt by the statute. Adding to the sums admitted to be exempt the residue thus arrived at and the statutory exemption of $50,000 the amount for which exemption is claimed will be $40,561,177.44, leaving a taxable remainder of $8,568,079.55. The Government required the payment of an additional sum reached by deducting from the exempted estate the amount of the tax to be paid, or in other words, adding the amount of the tax to the taxable estate. The suit is to recover this additional sum. The executors prevailed in the District Court and Circuit Court of Appeals after a discussion with which the Government well might have remained satisfied. 287 Fed. 651.
The Government's argument turns largely upon the consideration that a residue is only what is left after the payment of paramount claims. But this is not a tax upon a residue, it is a tax upon a transfer of his net estate by a decedent, a distinction marked by the words that we have quoted from the statute, and previously commented upon at length in Knowlton v. Moore, 178 U. S. 41, 49, 77, 20 Sup. Ct. 747, 44 L. Ed. 969. It comes into...
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