Hogg's Estate, In re
| Decision Date | 31 December 1971 |
| Docket Number | No. 871A168,No. 1,871A168,1 |
| Citation | 150 Ind.App. 650,276 N.E.2d 898 |
| Parties | In the Matter of the ESTATE of Charles R. HOGG, Deceased, Martha A. Gahman, Administratrix with Will Annexed |
| Court | Indiana Appellate Court |
Theodore L. Sendak, Atty. Gen., Stephen D. Clase, Deputy Atty. Gen., for appellant.
Edris, Edris & Dale by John H. Edris, Bluffton, for appellee.
STATEMENT OF THE CASE AND FACTS--This is an appeal by the State of Indiana (the State), on behalf of the Indiana Department of State Revenue, Inheritance Tax division, from a judgment sustaining a Motion by Martha A. Gahman (the Administratrix) To Strike the State's Petition For Redetermination Of Inheritance And Transfer Taxes.
On October 21, 1970, the Administratrix of the Estate of Charles R. Hogg (the Deceased) filed in the Wells Circuit Court, Wells County, Indiana, a Schedule of All Property and Affidavit of Executor or administrator, Trustees or Heirs for Inheritance Tax Appraisement (the Schedule), which included a schedule B--3 listing of property held in joint tenancy between the deceased and his wife. Listed in schedule B--3--Joint Tenancies-was a group of 17 United States Series H Savings Bonds (the Bonds) inscribed Elda I. Hogg or Charles R. Hogg, and valued at $1,000.00 apiece. Immediately following the listing of the Bonds, the Administratrix parenthetically noted that the entire consideration for their purchase was furnished by Elda I. Hogg, the surviving joint tenant (spouse). They were not included as part of the computation of the tax by the Administratrix on the Schedule. Another group of 29 Series H Bonds with a total value of $27,000.00 were also listed in schedule B--3 and they were included in the tax computation on the Schedule.
In his report, the County Assessor in his capacity as inheritance tax appraiser, found that schedule B--3 of the inheritance tax schedule as filed by the Administratrix was correct.
On October 28, 1970, the Trial Court signed and filed the inheritance tax decree, in which the value of the estate as set forth in the Schedule was found to be consistent with the report of the County Assessor, i.e., the value of the Bonds was omitted in the computation of inheritance tax. The Court then declared that the total tax due was $1,168.07. The tax was subsequently paid to the Treasurer of Wells County, Indiana, on November 2, 1970.
On March 16, 1971, approximately four and one-half months after the decree of the Court, the State filed its Petition For Redetermination Of Inheritance And Transfer Taxes. The State based its Petition on the allegation that the Bonds were erroneously omitted from the original appraisal of the estate and determination of the inheritance tax due without proof that the consideration was furnished by the surviving joint tenant (spouse). Subsequently, the Administratrix filed a Motion to Strike the Petition of the State, alleging that more than 90 days from the final determination of the tax by the Court had elapsed. Therefore the Petition For Redetermination was not timely filed pursuant to Ind.Ann.Stat. § 7--2411 (Burns 1953), IC 1971, 6--4--1--11 infra. The Trial Court sustained the Administratrix's Petition to Strike and this appeal Followed. There is no showing that the State failed to receive notice of the various steps involved in the appraisement of property and determination of inheritance tax or that the statutory procedure was not followed.
ISSUE--Whether the State's Petition For Redetermination Of Inheritance And Transfer Taxes filed four and one-half months after the entry of judgment determining the tax (omitting the value of the Bonds) was timely filed.
The State's position is their Petition was timely filed ant that the Trial Court applied the time limitation of the wrong statute, i.e., § 7--2411 (). It asserts that § 7--2411 applies to a rehearing only when an interested party is dissatisfied with the technical computation of the tax and its purpose is to allow questioning of the appraisement or determination of the tax based on the original records and proceedings. As their complaint is that the Bonds were 'erroneously omitted' from the determination of the tax due, the applicable section is Ind.Ann.Stat. § 7--2412a (Burns 1971), IC 1971, 6--4--1--12 which allows two years after the entry of the judgment in which to Petition For Redetermination.
The Administratrix argues that § 7--2412a applies only when a petitioner seeks a reappraisal of property on the basis that the value of the property shown on the Schedule does not reflect a fair market value. As the State does not seek a reappraisal of the value of the Bonds but only seeks to include them in determination of the tax because they were erroneously omitted, the applicable section is § 7--2411, which required a Petition For Redetermination to be filed within ninety days.
DECISION--It is our opinion that § 7--2411 () embraces omitted property and therefore the State's Petition For Redetermination of Inheritance Taxes was properly struck by the Trial Court.
As there is a dearth of Indiana authority on this subject, we must closely examine the statutes governing the imposition of Indiana inheritance tax upon transfers by decedents.
Applicable sections to the precise question before us appear to be:
§ 7--2401, IC 1971, 6--4--1--1. Inheritance and transfers taxed. 'A tax is hereby imposed, under the conditions and subject to the exemptions and limitations hereinafter described, upon all transfers, in trust or otherwise, of the following property, or any interest therein or income therefrom: . . .
Whenever property is held in the joint names of two (2) or more persons . . . and payable to either or the survivor, upon the death of one (1) of such persons, the exercise of the right of the surviving person . . . to the immediate ownership or possession and enjoyment of such property shall be deemed a transfer taxable under the provisions of this act in the same manner as though the whole property . . . belonged absolutely to the deceased joint owner . . . excepting therefrom such part thereof as may be proved by the surviving joint owner . . . to have originally belonged to him . . . and never to have belonged to the decedent . . .' (Emphasis supplied.)
This section defines the transfers to be taxed and specifically excepts therefrom jointly held property if the survivor can prove original ownership of all or part of the property. In such event the property is not taxable by the provisions of this section. No burden is specifically placed on the taxpayer to prove excepted property. Presumably he must do so if and when he is challenged.
§ 7--2407, IC 1971, 6--4--1--7. Filing schedule--Duties of fiduciaries--Penalty for violation--Appraiser--Appraisal Costs. 'All executors . . . of any estate of a resident decedent, shall within twelve (12) months after the date of decedent's death, file with the court, . . . a complete and detailed schedule upon forms prescribed by the state board of tax commissioners, of all property taxable under the provisions of this act, together with an itemized schedule of indebtedness . . . said schedule shall also set out . . . the fair market value of each and every item of property at the time of decedent's death . . .
The court shall, after such completed schedule has been filed, examine same and refer such schedule to the county assessor for verification of the statement contained therein, and if . . . such schedule is found to be incomplete, the court shall order same to be promptly revised, completed and refiled.' (Emphasis supplied.)
The Administratrix filed 'a complete and detailed schedule . . . of all property taxable' and otherwise complied with this section. She listed and valued the Bonds in schedule B--3, titled Joint Tenancies, with the note that the entire consideration for these bonds was furnished by the surviving joint tenant, and therefore not to be considered part of 'the property taxable'. As a result of this listing notice was given by the Administratrix that the Bonds were claimed as an exception under § 7--2401, supra, and this claim then became a part of the 'records, proceedings, and proofs' for determination of the tax in 'the original hearing' referred to in the 90-day Section.
§ 7--2408, IC 1971, 6--4--1--8. Determination of tax--County assessor Appraisement--Deputies and employees--Salaries--Expenses. 'The court shall within ten (10) days after the filing of said schedule, refer it to the county assessor who shall examine the schedule for inaccuracies and omissions and appriase all property the transfer of which is subject to taxation under the provisions of this act at its fair market value as of the date of transfer and make diligent inquiry and investigation into any and all facts concerning the fair market value of such property and all transfers of property subject to taxation under this act made by the decedent prior to his death. If after examination by the county assessor and the court such schedule is found to be incomplete, the court shall order same to be promptly revised, completed and refiled . . .
The county assessor, by virtue of his office, shall be the inheritance tax appraiser . . .' (Emphasis supplied.)
The substance of this section is that the County Assessor as the inheritance tax appraiser is required to examine the Schedule for inaccuracies and omissions and appraise the property for later submission to the court. At this stage, inaccuracies and omissions are brought to light and become part of the Assessor's report to the court having probate jurisdiction.
§ 7--2409, IC 1971, 6--4--1--9. Notice of Appraisal--Appraisement. ...
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