Sloan v. Calvert, 12040

• Decision Date: 20 June 1973
• Docket Number: No. 12040,12040
• Citation: 497 S.W.2d 125
• Parties: Christine Burke SLOAN, Appellant, v. Robert S. CALVERT, Comptroller of Public Accounts, Appellee.
• Court: Texas Court of Appeals

Page 125

497 S.W.2d 125

Christine Burke SLOAN, Appellant, v. Robert S. CALVERT, Comptroller of Public Accounts, Appellee.

No. 12040.

Court of Civil Appeals of Texas,

Austin.

June 20, 1973.

Rehearing Denied July 11, 1973.

John B. Sloan, Diboll, for appellant.

John L. Hill, Atty. Gen., of Texas, Fisher A. Tyler, Asst. Atty. Gen., Austin, for appellee.

O'QUINN, Justice.

Decision in this case turns on construction and application of an inheritance tax statute limiting the periods of time within which the State may enforce its lien by suit or file suit to collect the tax without foreclosure of the lien. (V.A.T.S. Tax.-Gen. art. 14.18(D); Acts 1967, 60th Leg., p. 421, ch. 187, sec. 2)

The issue arises in the main because at the time of the death of the decedent the statute of limitations concerning collection of inheritance taxes had not been enacted and no other applicable limitation was provided by statute.

Christine Warren Burke, whose estate is the subject of this lawsuit, died intestate on March 22, 1957. Her surviving husband in June of 1957 filed a state inheritance tax return as attorney in fact for Christine Burke Sloan, decedent's daughter, who is appellant in this suit. The return alleged the taxable value of the estate to be $35,564.70. The Comptroller of Public Accounts accepted the return and issued an official receipt in August of 1957 acknowledging payment of $94.73 in taxes.

About fourteen years thereafter, in May of 1971, a federal estate tax return was filed showing a taxable estate of $111,438.75, or more than three times the value reported to the Comptroller in 1957.

The Internal Revenue Service later issued its final assessment and determination of value. Thereafter appellant failed to file an amended or supplemental inheritance tax return with the Comptroller and did not report to the Comptroller the value of the estate as fixed and determined by the Federal Government, in compliance with state statute. (V.A.T.S. Tax.-Gen. art. 14.14(D))

The Internal Revenue Service notified the Comptroller that the federal estate tax return had been made and reported its final assessment and determination of value in the amount of $111,438.75. The Comptroller, acting on such information, in October of 1971, assessed additional inheritance taxes in the amount of $1,498.43, plus interest in the sum of $562.90, in relation to the estate of Christine Warren Burke.

The State of Texas, acting through the Comptroller and the Attorney General, filed suit in June of 1972, for collection of the inheritance taxes and to enforce the State's lien, against Christine Burke Sloan, individually and as an heir of the decedent, Christine Warren Burke.

Trial was before the court, upon pleadings and stipulations of the parties, and the court entered judgment for the State, from which Christine Burke Sloan brings this appeal. We will affirm judgment of the trial court.

The limitations provisions are contained in subsection (D) of Article 14.18:

'(D) Enforcement. The lien provided by this Article may be enforced in any suit brought for the collection of said taxes, penalties, interest, and costs or otherwise enforced under the laws of this state. The lien provided for by this Article shall remain in force on any property of the estate whether or not any probate proceedings are filed on the estate. Said Lien shall remain in force only for five (5) years after the date of the death of the decedent, unless sooner released by the Comptroller Or unless a suit for the collection of any tax due and to enforce said lien is filed before the expiration of said five (5) year period; provided, a Suit for the collection of taxes without the foreclosure of said lien may be Filed within ten (10) years from said death and the Collection of said taxes, except where suit has been filed for same as herein provided, After said ten (10) year period is forever barred . . ..' (Emphasis supplied)

The final clause of this subsection prescribes that the bar of lien and suit stated earlier in the statute will be without effect when certain reports are not filed with the Comptroller. That clause is quoted in full:

'. . . provided, the provisions of this Section (D) pertaining to the duration of the lien for five (5) years and the ten (10) year bar of the collection of taxes Shall have no force or effect unless the reports required by Article 14.14 of this Chapter are filed as provided in said Article.' (Emphasis supplied)

The reports required under Article 14.14 are (A) Preliminary Report, (B) Inventory and Appraisement, (C) Final Report, and (D) Report of Determination of Federal Tax. It is the last report, determination of the federal tax, with which we are concerned in this case. Subsection (D) states the requirements:

'(D) Report of Determination of Federal Tax. Within thirty (30) days after receiving notice or information of the final assessment and determination of the value of the estate assessed and determined by the Federal Government for...