92 C. Cls

STEAMBOAT-Continued.

V. It is well settled that where there has been a total loss
the shipowner cannot recover for charter hire in a suit
for damages on account of the negligence of another.
The Umbria, 166 U. S. 404, 422, cited. Id.

SUBROGATION.

See Contracts XVII, XVIII.
SUBSIDIARY, WHOLLY OWNED.

See Taxes XXXVI.

SUIT FOR SALARY.

See Title to Office I, II.
SURETY, COMPLETION BY.
See Contracts XVII, XVIII.

TAXES.

INCOME TAXES.

I. (1) Where residue of decedent's estate, consisting largely
of corporation stocks, was left in trust to his sons
and daughter as trustees, who were also executors,
and where said trustees were persons of limited
business experience; and where the attorney's
services consisted chiefly in advising the executors
as to the best means for conserving the estate and
as to what investments to dispose of and what other
investments to make, it is held that the attorney
and executors were engaged in business, "in the
business of conserving the estate and protecting
its income," and that the fees paid by the estate
to the attorney for such services were expenses
deductible for income-tax purposes. Pyne, 44.*

II. (2) Attorney's fees are ordinary and necessary expenses
in carrying on a trade or business, and are deduct-
ible for income-tax purposes. Id.*

III. (3) Under the income-tax decisions of the Supreme
Court "business" has been defined as "that which
occupies the time, attention, and labor of men for
the purpose of a livelihood or profit," and what-
ever engages the time, attention, and labor of men
in order to conserve what they have or to avoid
loss is likewise a business. Id.*

IV. (4) Where plaintiff on February 8, 1932, made a declara-
tion of trust in which he named himself as trustee,
with members of his family, including his wife, as
beneficiaries, said trust being irrevocable for a
period of five years, and at the end of that period
said trust could be terminated by the plaintiff, on
notice, and where under the provisions of such
declaration of trust plaintiff bestowed upon him-
self as trustee broad and unlimited powers to deal

• Vacated by the Supreme Court, April 28, 1941. See page 44.

92 C. Cls.

TAXES-Continued.

INCOME TAXES-Continued.

with the trust property upon such terms and condi-
tions as he deemed best, it is held that the plaintiff
as grantor did not divest himself of ownership of
the property in question so as to be considered no
longer the owner of the property for the pur-
poses of Section 22 (a) of the Revenue Act of
1934. Helvering v. Clifford, 309 U. S. 331, cited.
Reuter, 74.

V. (5) Where plaintiff, a New York corporation engaged in
the business of promoting boxing and wrestling
contests, sold admission tickets for three boxing
bouts in 1935, at the "established price," which
figure included the New York State admission
tax, and where the Federal tax was computed on
said "established price," the amount of said Fed-
eral tax was shown on the admission ticket and
was paid by the purchaser of such ticket, and
where said amount of Federal tax was duly re-
mitted by the plaintiff to the Government, it is
held that the plaintiff was merely the collector of
the tax, and not the taxpayer, and is not entitled

to recover. Twentieth Century Sporting Club, 93.
VI. (6) Under Section 711 of the Revenue Act of 1932, how-
ever the tax may have been computed, it was paid
as the law demanded "by the person paying for
such admission." Id.

VII. (7) Where claim for refund of taxes was filed within two
years after the payment of two deficiency assess-
ments for the taxable year but more than two
years after payment of the original tax; it is held
that plaintiff is not entitled to recover any part
of the original tax. Harvey Coal, 186.

VIII. (8) Where it is admitted by defendant that plaintiff is
entitled to deductions of amounts treated by the
Commissioner of Internal Revenue as capital ex-
penditures for assets, on which depreciation was
allowed; it is held the amounts so allowed for de-
preciation should be restored to income. Id.

IX. (9) Where in a proceeding before the Board of Tax
Appeals, the Commissioner had asserted against
the petitioner, plaintiff in the instant case, a de-
ficiency on account of its tax liability for the last
two months of 1924, from which said plaintiff
appealed to the Board, first, on the ground that
no depreciation had been allowed on certain assets,
and second, on the ground that the Commissioner

92 C. Cls.

TAXES-Continued.

INCOME TAXES-Continued.

should have allowed depreciation at the rate of 10
percent on its buildings, tipple, and furniture and
fixtures, instead of at the rate of 5 percent, and
where the Board found that the said petitioner
was entitled to a rate of 10 percent and that the
proper base for such an allowance on such assets
was the cost to the petitioner; it is held that the
said finding of the Board is res judicata on the
question of the proper depreciation base and the
rate of depreciation. Id.

X. (10) It is incumbent on plaintiff in a proceeding to
advance all grounds and to introduce all evidence
necessary to support its claim, and its failure to do
so does not relieve it of the estoppel of the former
judgment in a subsequent suit on the same cause
of action. Id.

XI. (11) Where the causes of action are different, although
the parties are the same, a former judgment is res
judicata only as to questions presented and decided
in the former proceeding; nor is the plaintiff pre-
cluded in the second action from furnishing addi-
tional evidence to support its demand, at least
where the question presented has not been deter-
mined on account of absence of necessary proof.
Id.

XII. (12) Where in the prior case the Board of Tax Appeals
held that the transaction between the petitioner,
plaintiff in the instant case, and its predecessor was
not a reorganization, and therefore the question
at issue was the cost of the assets to the petitioner
and not the cost thereof to its predecessor, and
where the petitioner had proceeded on the con-
trary theory and had introduced no proof as to
the cost of said assets to petitioner, it is held that
it would be manifestly inequitable to preclude
plaintiff from introducing such proof in a suit to
recover taxes for later years. Id.

XIII. (13) Following the decision in Neuberger v. Commissioner,
311 U. S. 83, it is held that under section 23 (r) of
the Revenue Act of 1932, a loss sustained by the
taxpayer, engaged in the business of trading in
securities on his individual transactions in stocks
and bonds held for two years or less may be offset
against his share of partnership profits realized
from similar transactions during the same period.
Central Hanover et al, 201.

XIV. (14) Where taxpayer on May 27, 1929, filed a claim for
refund solely on the ground that a deficiency was
asserted against a subsidiary of taxpayer for the
year 1926, which affected its tax liability for 1927,
and where such claim had no reference to the tax-
payer's right to deduct depletion for the year 1927,
it is held that a subsequent claim filed March 4,
1935, claiming deduction for additional depletion
for 1927 and for loss on liquidation of a subsidiary
corporation, cannot in any sense be considered as
an amendment of the claim of May 27, 1929, and
said claim of March 4, 1935, was properly dis-
allowed by the Commissioner on the ground that it
was barred by the statute of limitations. Wrights-
man Petroleum, 217.

XV. (15) Where taxpayer on February 7, 1931, filed a supple-
mental claim for refund for the calendar year 1927
in the amount of an overassessment found by the
Commissioner, which overassessment was later re-
funded in said amount, and where taxpayer in
said claim for refund of February 7, 1931, set forth
certain conditions on which said then proposed
refund would be accepted, said conditions relating
to claims already on file, based on grounds other
than those on which said overassessment was
found, it is held that the claim of March 4, 1935,
cannot be considered an amendment of said claim
of February 7, 1931, based on distinct and un-
related grounds and for a different amount. Id.
XVI. (16) The purpose of a claim for refund is to put the
Government on notice that the taxpayer claims
his taxes have been erroneously assessed and that
he demands a return of the amount erroneously
collected. Id.

XVII. (17) If a taxpayer files a claim for refund on a specific
ground, taxpayer cannot later, after the running of
the statute, file a claim on an entirely unrelated
ground. Id.

XVIII. (18) A taxpayer by his own ipse dixit cannot extend the
statutory period of limitation. Id.

XIX. (19) A protest is not a claim for refund; if the tax is paid
under protest and no claim for refund is subse-
quently filed within the statutory period, it may
well be assumed that the protest is abandoned.
Id.

92 C. Cls.

TAXES-Continued.

INCOME TAXES-Continued.

XX. (20) An oral claim made to a Revenue Agent is not a
sufficient compliance with the statutory require-

ment that a claim for refund must be filed by the
taxpayer; claim must be in writing. Id.

XXI. (21) Where taxpayer and her husband, residents of the
State of California, on May 31, 1930, entered into
a written agreement under the terms of which all
the income earned by each was to be the sole and
separate property of the party receiving it, free
from the community rights of the other under the
laws of California, it is held that taxpayer's income
for the years 1930 and 1931 was taxable in accord-
ance with said agreement and not in accordance
with the community property laws of the State.
Helvering v. Hickman, 70 Fed. (2d) 985; Marshall
v. United States, 88 C. Cls. 393; 308 U. S. 597.
Ina Claire, 239.

XXII. (22) Where taxpayer and her husband requested and
agreed in a written consent that any and all over-
assessments against either might be applied as
credits against any deficiencies assessed against the
other, and where in accordance with such agree-
ment overassessments against her husband for the
years 1930 and 1931 were applied as credits
against the deficiencies assessed against plaintiff
for said years, it is held that the Commissioner of
Internal Revenue was without authority to reverse
the credits without the consent of all parties, and
plaintiff is accordingly entitled to recover. Id.
XXIII. (23) Where plaintiff on May 25, 1935, filed claims for
refund for the years 1930 and 1931, which were
rejected on March 5, 1937, by the Commissioner,
who in his letter of rejection refused to follow the
decision in Helvering v. Hickman; and where
subsequently the Commissioner decided he would
follow the Hickman case, and accordingly plaintiff
asked for reconsideration of her claim for refund;
it is held that consideration of said claim was not
precluded by "equitable estoppel." Id.

XXIV. (24) Where consent filed by taxpayer and her husband on
December 1, 1932, and June 1, 1933, at which
times there was a deficiency outstanding against the
plaintiff and overassessments against her husband,
had been fully consummated; it is held that such
consent agreements had become functus officio,
and could not be subsequently availed of to rescind
the action previously taken thereunder. Id.