Neustadter v. United States, 8176.
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
| Writing for the Court | WILBUR, MATHEWS, and HANEY, Circuit |
| Citation | 90 F.2d 34 |
| Parties | NEUSTADTER et al. v. UNITED STATES. |
| Docket Number | No. 8176.,8176. |
| Decision Date | 03 May 1937 |
90 F.2d 34 (1937)
NEUSTADTER et al.
v.
UNITED STATES.
No. 8176.
Circuit Court of Appeals, Ninth Circuit.
May 3, 1937.
Adolphus E. Graupner, of San Francisco, Cal., for appellants.
H. H. McPike, U. S. Atty., and Esther B. Phillips, Asst. U. S. Atty., both of San Francisco, Cal., and Robert H. Jackson, Asst. Atty. Gen., and Frederick W. Dewart, J. Louis Monarch, and Julian G. Gibbs, Sp. Assts. to Atty. Gen., for the United States.
Before WILBUR, MATHEWS, and HANEY, Circuit Judges.
WILBUR, Circuit Judge.
Appellee brought this suit in equity against appellants, devisees and legatees of the estate of David Neustadter, deceased, to have the property of his estate, which had been distributed to them on or before September 1, 1926, charged with a trust in favor of the United States to the extent of a deficiency assessment for federal estate tax against his estate made September 27, 1929.
The executors filed a federal estate tax return on behalf of the estate December 31, 1923, deducting from the gross estate the community property interest of the surviving widow. The amount of tax due as disclosed by the return was thereupon paid and the amount of deficiency which the Commissioner, on November 10, 1925, notified the executors was due, was also paid. On February 25, 1924, the superior court of the State of California decreed a final distribution of the estate, and thereafter the property of the estate was distributed pursuant to the decree. The executors of the estate have never been discharged, as provided by the California Probate Code, § 1066. On January 4, 1926, the Supreme Court, in United States v. Robbins, 269 U.S. 315, 46 S.Ct. 148, 70 L.Ed. 285, held that the community property interests of a surviving widow in California should be included in the taxable gross estate of a decedent husband and a tax paid thereon. Following that decision the Commissioner of Internal Revenue made an audit of the return of the executors and found that there was a deficiency in the estate tax of $12,012.99.
Thereafter, on September 21, 1926, a deficiency notice was mailed by the Commissioner pursuant to section 318 of the Revenue Act of 1926 (44 Stat. 9, 81) to "Newton H. Neustadter, et al., Executors, Estate of David Neustadter." The executors, on November 2, 1926, petitioned the United States Board of Tax Appeals for a redetermination of the deficiency under section 308 of the Revenue Act of 1926, 44 Stat. 75. After hearing, the Board, on March 14, 1929, made an order
Appellants' first contention is that there is no evidence to support the finding of the District Court that the tax had not been paid.
In its bill of complaint appellee alleged that "although notice and demand for the payment of said tax was duly made by the Collector of Internal Revenue on October 18, 1929, no part of said tax or interest has been paid." In their answer appellants denied this allegation "but in lieu thereof" alleged that the collector of internal revenue "caused a form of notice and demand for payment to be made upon one of the asserted executors"; that on the service of the form of notice and demand "the representative of the Collector was informed that the estate of David Neustadter had been distributed long before and was without assets; and, also, that said Collector made no further attempt toward collection of said alleged deficiency * * *." This was an admission of nonpayment and no evidence or finding was required on that subject.
Appellants also contend that the statute of limitations has run against the Government. This contention is based in part on the assumption that as the trial court stated in its findings that notice of deficiency was given under section 316 of the Revenue Act of 1926, the applicable statute of limitations was that provided in sections 310, 311, and 316 (b) of the Revenue Act of 1926 (44 Stat. 77, 80). There is no merit in this contention. The notice was given pursuant to section 318, subd. (a), of the Revenue Act of 1926, supra, and so stated. The error in the findings was evidently a clerical mistake.
Section 318 of the Revenue Act of 1926, supra, provides that the limitations to be applied thereunder in the case of an estate tax imposed by the Revenue Act of 1921 (42 Stat. 227) shall be that prescribed in section 1109 of the Revenue Act of 1926 (44 Stat. 9, supra).
Section 1109 (a) (1) (3) of the Revenue Act of 1926, supra, provides:
"Sec. 1109, (a) Except as provided in sections 277, 278, 310, and 311 —
"(1) Notwithstanding the provisions of section 3182 of the Revised Statutes or any other provision of law, all internal-revenue taxes shall (except as provided in paragraph (2) or (3) of this subdivision) be assessed within four years after such taxes became due, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of five years after such taxes became due. * * *
"(3) Where the assessment of any tax imposed by this Act or by prior Act of Congress has been made (whether before or after the enactment of this Act) within the statutory period of limitation properly applicable thereto, such tax may be collected by distraint or by a proceeding in court (begun before or after the enactment of this Act), but only if begun (A) within six years after the assessment of the tax, or (B) prior to the expiration of any period for collection agreed upon in writing by the Commissioner and the taxpayer."
Section 310 of the Revenue Act of 1926 provides:
"(b) The running of the statute of limitations provided in this section or in section 311 on the making of assessments and the beginning of distraint or a proceeding in court for collection, in respect of any deficiency, shall (after the mailing of a notice under subdivision (a) of section 308) be suspended for the period during which the Commissioner is prohibited from making the assessment or beginning distraint or a proceeding in court, and for 60 days thereafter."
"Sec. 308. (a) If the Commissioner...
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