Powe v. COMMISSIONER OF INTERNAL REVENUE, 24299.

• Decision Date: 23 February 1968
• Docket Number: No. 24299.,24299.
• Citation: 389 F.2d 46
• Parties: Margaret Thomas POWE, William A. Powe, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

389 F.2d 46 (1967)

Margaret Thomas POWE, William A. Powe, Petitioners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.

No. 24299.

United States Court of Appeals Fifth Circuit.

December 18, 1967.

Rehearings Denied February 23, 1968.

deQuincy V. Sutton, Meridian, Miss., for petitioners.

Lester R. Uretz, Chief Counsel, IRS, Christopher J. Ray, Atty., IRS, Mitchell Rogovin, Asst. Atty. Gen., Lee A. Jackson, Harry Marselli, Meyer Rothwacks, Deene R. Goodlaw, William A. Friedlander, Attys., Dept. of Justice, Washington, D. C., for respondent.

Before RIVES and GODBOLD, Circuit Judges, and HUGHES, District Judge.

PER CURIAM.

On April 22, 1958, petitioners, husband and wife, created an irrevocable trust for the benefit of various members of their family. The property conveyed, among other items consisted of nine parcels of land. A gift tax return, filed for the year 1958, reported the fair market value of the nine parcels as $326,630.00. The Commissioner of Internal Revenue, in a deficiency notice, increased the valuation to $664,179.00. In a hearing before the Tax Court, following the deficiency assessment the total value of the land involved was fixed at $531,970.00. We affirm.

The principal questions involved are: (1) whether the Tax Court is limited to making adjustments in the value of the particular items included in the deficiency notice and (2) whether the Tax Court's valuation is supported by substantial evidence.

The Commissioner's deficiency notice to petitioners did not include the mineral interests as a separate item in determining the value of each of the tracts of land involved. It is petitioners' contention that for this reason the Tax Court should have valued the lands without consideration of the minerals therein. In making its re-determination of tax liability the Tax Court is free to consider all elements reflected in the record. In Bernstein v. Commissioner of Internal Revenue, 5 Cir., 267 F.2d 879 (1959) this Court, in approving the Tax Court's decision, said at p. 881:

"The taxpayer takes the position before us that the Tax Court\'s findings and decision depart from and are not responsive to the issues as they were submitted to the Tax Court. * * * It is immaterial whether the Commissioner proceeded upon a wrong theory in determining the deficiency, and the taxpayer has the burden of showing that the assessment is wrong on any proper theory."

While not of significance it might be pointed out that the value found by the Tax Cour...