TAXES Continued.
Estate Tax-Continued.
Commissioner should have refunded, upon the timely claim filed by the executors, is a matter solely for the decision of Congress. Id.
VIII. (5) Where petition was filed pursuant to Senate Reso- lution referring to the Court of Claims bill (S. 3869) pending before the Senate; and where the claim presented by the petition was previously before the court and a decision and judgment were entered therein (80 C. Cls. 211); the court does not have authority or jurisdiction to enter judgment under the proviso of section 151 of the Judicial Code (Title 28, U. S. Code, Section 257). Id.
IX. (6) Where decedent in 1924 transferred to certain trustees, of which decedent was one, substan- tially all of his property under a trust instrument prohibiting sale of certain stock held unless all of such stock was sold; and where in 1928 said trust was terminated and new trust instrument was executed by settlor and beneficiaries with substantially the same conditions but without restrictive provisions as to sale of said stock, and with changes as to the termination of the trust; both in form and substance the 1928 trust was something different from the 1924 trust, and for estate tax purposes the property rights of decedent in the trust property must be adjudged on the basis of the 1928 trust instrument. Black- man and Palmer, 413.
X. (7) Where under the 1928 trust agreement, of which settlor was a trustee and beneficiary, settlor to- gether with other beneficiaries had the right to revoke the trust and upon revocation settlor would have been entitled to receive one-half of the corpus, and where settlor's rights ended at his death and such half passed to members of his family; the value of settlor's one-half interest was properly included in decedent's gross estate for estate tax purposes under the provisions of section 302 (d) of the Revenue Act of 1926 (44 Stat. 9, 71). Id.
XI. (8) Where, upon termination of trust, settlor waived his right to receive one-half of the corpus, and joined in the direction that the trust property be divided among beneficiaries equally, relying upon a prior agreement that said property would
TAXES-Continued.
Estate Tax-Continued.
be conveyed to a new trust in which settlor would be entitled to share; settlor was also "settlor" of the new trust, and the share to which he would have been entitled in event of termination of new trust should be included in determining settlor's estate tax. Id.
XII. (9) While decedent did not directly make a transfer of property to the 1928 trust, he caused others to make the transfer in such a manner that he retained a valuable interest therein, and it is well established that the person who furnishes the consideration for the creation of a trust is the "settlor," even though in form the trust is created by another. Lehman v. Commissioner, 109 Fed. (2d) 99; certiorari denied, 310 U. S. 637; Buhl v. Kavanagh, 118 Fed. (2d) 315, cited. Id.
XIII. (1) Where the Commissioner of Internal Revenue, on the September 1938 Supplemental List, under the Revenue Act of 1926 (44 Stat. 9, 104), and the National Prohibition Act (41 Stat. 305, 317), assessed against plaintiff certain internal reve- nue taxes on distilled spirits alleged to have been imported by plaintiff during the period from March 1929 to January 1931, and on October 29, 1930, and November 12, 1930; and where, after notice of assessment and demand for payment, said taxes were paid under protest by plaintiff on November 28, 1938, and a claim for refund, later amended, was filed by plaintiff, alleging that the claimant had not imported the distilled spirits as charged, and alleging further that the assessment had been made after the liability for said taxes had been barred by the statute of limitation; and where such claim for refund was rejected by the Commissioner; it is held, upon the evidence adduced, that said distilled spirits were imported as alleged, that such importation was with intent to defraud the Government of the lawful revenue due, and plaintiff is not entitled to recover. McClure, 381.
XIV. (2) Where there has been a fraudulent attempt to evade the payment of tax, and where assessment was made under a charge of fraud; the statute of limitation (Revenue Act of 1926, section 1109, as amended by the Revenue Act of 1928, section 619 (a)) is not applicable. Id.
TAXES-Continued.
Internal Revenue Tax-Continued.
XV. (3) A tax assessment made by the Commissioner of Internal Revenue is presumed to be correct, and the facts found by the Commissioner to support the assessment are presumed to be correct. Niles Bement Pond Co. v. United States, 281 U. S. 357, 361, and other cases cited. Id.
XVI. (4) Fraud will not be presumed. Vitelli v. United States, 250 U. S. 355, and other cases cited. Id. XVII. (5) It is the duty of the court to draw from the facts proven all reasonable inferences, and where no reasonable inferences can be drawn from the facts found or admitted other than that fraud has been committed or attempted, fraud is suf- ciently established. Tucker v. Moreland, 10 Peters (U. S.) 57, 58, cited. Id.
XVIII. (6) Where plaintiff's claim for refund was admitted in evidence by stipulation of the parties; and where thereafter plaintiff took the witness stand but was not asked to reaffirm the statements made in his claim, and did not reaffirm such state- ments; and where plaintiff did not in any other way testify whether or not he had imported the distilled spirits in question, as alleged by the Commissioner of Internal Revenue; it is held that under such circumstances the allegations of the claim for refund cannot be considered as evidence of the facts therein recited. Id.
XIX. (7) Where defendant's attorney did not make it plain that he was agreeing to the receipt in evidence of plaintiff's claim for refund only as proof that such claim had been filed, and not as evidence of the facts therein alleged; it is not to be im- plied that he agreed that such allegations might be treated as evidence, since the plaintiff who had made the allegations was in court ready to testify. Id.
XX. (8) Where it is established that distilled spirits were imported, and where for seven years no report of such importation was made; and where, dur- ing such period, no tax under the applicable in- ternal revenue statute was paid, and such tax was not paid until after assessment by the Com- missioner of Internal Revenue and demand for payment; it is held that the only reasonable in- ference is that there was intent to defraud the Government of revenue.
TAXES-Continued.
Internal Revenue Tax-Continued.
XXI. (9) Where the Commissioner made an assessment upon a finding that distilled spirits had been imported without payment of the tax due; and where the Commissioner also found that the distilled spirits had been diverted for beverage purposes but did not assess the tax on diversion; and where there is no other proof of diversion; it is held that the defendant is not entitled to recover from plaintiff the amount of the diversion tax, the allegations of defendant's counterclaim not having been sufficiently proven. Id.
XXII. (1) Where among the proposed activities of plaintiff organization, as set forth in its organization prospectus, the greatest emphasis was in prac- tice placed on the improvement of the member's "ethical standards, his business standing and his financial status"; and where the monthly meet- ings of the members were held in a public audi- torium and at such meetings a message was read from the national founder of the club, dealing with ethical and moral topics; and where the organization had no clubhouse, no dining room, no bar, no game room, no library, no gymnasium nor any other of the facilities commonly af- forded by a social or athletic club; it is held that the social activities of the organization were "subordinate and merely incidental to the active furtherance of a different and dominant purpose" within the meaning of the Treasury Regulation and consequently under the provisions of section 501 (a) (1) and (2) of the Revenue Act of 1926, as amended by section 413 (a) of the Rev- enue Act of 1928 (Internal Revenue Code, section 1710) plaintiff is entitled to recover taxes im- posed as upon a social or athletic club. Seattle District No. 3 Mantle Club, 562.
XXIII. (2) The stated purpose of an organization does not de- termine its taxable status under section 501 (a), as amended, if its actual operations are different from such stated purpose. Id.
TITLE UNDER MÉXICAN LAW.
TREATIES NOT RATIFIED.
See Indian Claims, I, V. TRUST, TERMINATION OF. See Taxes IX, X, XI. UNDISCLOSED CONDITIONS.
See Contracts XXXIX.
USE AND OCCUPANCY.
See Indian Claims IV.
VALIDITY.
See Patents I, II, III, IV, V, VI.
VETERANS' PREFERENCE.
Determination of department head under the Act of 1876 (19 Stat. 143, 169) is final if fairly and impartially made. Brimberry, 335.
VETO BY THE PRESIDENT.
See Jurisdiction IX.
WAIVER OF TIME LIMIT.
See Contracts XXXIV.
"Flying Officer"-See Pay and Allowances I.
"Materials"-See National Industrial Recovery Administration Act
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