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98 C. Cls.

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

98 C. Cls.

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. (20) 99; certiorari denied, 310 U. S.
637; Buhl v. Kavanagh, 118 Fed. (20) 315, cited.

Internal Revenue Tax.
XIII. (1) Where the Commissioner of Internal Revenue, on

the September 1938 Supplemental List, under the
Revenue Act of 1926 (44 Stat. 9, 101), 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.

98 C. Cls.

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. Id.

98 C. Cls.

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.
Excise Tax,
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.

See Indian Claims II.

See Indian Claims VI.

98 C. Cls.


See Indian Claims, I, V.

See Taxes IX, X, XI.

See Contracts XXXIX.

See Indian Claims IV.

See Patents I, II, III, IV, V, VI.

Determination of department head under the Act

of 1876 (19 Stat. 143, 169) is final if fairly and

impartially made. Brimberry, 335.

See Jurisdiction IX.

See Contracts XXXIV.


"Flying Officer"--See Pay and Allowances I.

"Materials"-See National Industrial Recovery Administration Act

"Settlor"-See Taxes XIII.

533123-43-vol. 98—-56

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