Document: 357 U.S. 39 78 S.Ct. 1047 2 L.Ed.2d 1126 COMMISSIONER OF INTERNAL REVENUE, Petitioner,v.Jean F. STERN. No. 311. Argued April 7, 1958. Decided June 9, Mr. John Davis, Washington, D.C., for petitioner. Walter E. Barton, respondent. Justice BRENNAN delivered the opinion of Court. 1 Respondent petitioned Tax Court redetermination liability assessed against her deceased husband's unpaid income tax deficiencies. The held that, as beneficiary proceeds life insurance exceeding amount deficiencies, respondent was liable full Appeals reversed, 242 F.2d 322, holding that not even to extent cash surrender values policies, which less than We granted certiorari. 355 810, 53, 29. Dr. Milton J. Stern died a resident Lexington, Kentucky, on 12, 1949. Nearly six years later had been deficient in his taxes 1944 through 1947 and amount, including interest penalties, $32,777.51. Because assets estate were insufficient meet this liability, Commissioner proceeded under § 311 Internal Revenue Code 1939, 26 U.S.C.A. 311(a)(1), (f)1 respondent, Stern's widow, policies by him. value these at death totaled $47,282.02 $27,259.68 respectively. right change draw down each policy retained until Stern. There no findings paid any premiums with intent defraud creditors or he insolvent time prior death. 3 rested its decision upon two grounds: (1) transferee within meaning 311, Tyson v. Commissioner, 6 Cir., 212 16; (2) event Kentucky statutes, Ky.R.S., 1948, §§ 297.140, 297.150, limit beneficiary's insured fraud creditors, consequently there since evidence premium creditors. Without intimating view correctness first we find it unnecessary decide whether 3112 because hold statutes govern question create Government circumstances case. 4 First. Section 311(a) provides 'The law equity, property taxpayer, respect * imposed taxpayer chapter' shall be 'assessed, collected, same manner subject provisions limitations case deficiency chapter *.' decisions have conflict substantive enforced is determined state federal law. Compare, e.g., Rowen 215 641, Botz Helvering, 8 134 538, United States Bess, 243 675, Stoumen 27 T.C. 1014. This has expressly left open. Phillips 283 589, 602, 51 608, 613, 75 L.Ed. 1289. 5 courts repeatedly recognized neither creates nor defines but merely new procedure may collect taxes. supra; Hatch Morosco Holding Co., 50 138; Liquidators Exchange National Bank States, 65 316; Harwood Eaton, 68 12; Weil 91 944; Tooley 9 121 350.3 Prior enactment 280 Act 1926, 44 Stat. 61, predecessor rights creditor, enforceable only bringing bill equity an action law, depended legal theories developed protection private cases where debtor transferred another. supra, page 592, note 2, 610, 1289; cf. Pierce 255 398, 41 365, 697; Hospes Northwestern Mfg. & Car 48 Minn. 174, N.W. 1117, 15 L.R.A. 470. proved unduly cumbersome, however, comparison summary administrative remedy allowed himself, Rev.Stat. 3187, amended 1924, 43 343, 3690, 3691. section designed 'to provide enforcement such provided act deficiencies.' S.Rep. 52, 69th Cong., 1st Sess. 30. 'Without way changing existing (this section) enforces enforced; is, notice commissioner opportunity either pay sue refund else proceed before Board Appeals, review courts. Such proceeding lieu present H.R.Conf.Rep. 356, 44. Therefore, purely procedural statute must look other sources definition liability. Since are choice between decisional definition. Second. urges further 'uniformity liability,' reject applicability favor having fashion governing rules. Cf. Clearfield Trust Co. 318 363, 63 573, 87 838. But field displacing determinative would sharp break past. Federal courts, seeks from persons defaulting applied Hutton 59 66; Goldblatt, 7 128 576; itself urged reliance similar cases, G.C.M. 2514, VI—2 Cum.Bull. 99; 3491, VII—1 147. Congress aware use when consideration, disclaiming intention define 30, identified 'existing liability' ensuing '(b)y reason trust fund doctrine various State statutory 43. It true addition invoked principles judicially another insolvent. supra. In 'general law' did distinguish fact remains varying definitions resulted absence uniformity Yet Congress, knowledge enacted, refrained disturbing prevailing practice. Uniformity always policy. Under 70 Bankruptcy Act, instance, determine what bankrupt 30 565, amended, 11 U.S.C. 110, 110. What good transfer one jurisdiction might so manifested desire think creation inappropriate cases. diversity now apply defining state-created rights, obligations, liabilities. Erie R. Tompkins, 304 64, 58 817, 82 1188. They would, course, do actions brought longer formulate body larger creditors' effort small creditor necessarily episodic. That plainly justified exists flexible pertinent continuously being adapted affecting all Accordingly speaks contrary, existence should Third. applicable insured's least where, here, 297.150,4 therefore Government. parties contest construction local 10 Government, argues brief, 'Just situation lien attached destroy lien, exemptions.' agree lifetime. today 51, 1054, New Jersey statute, could defeat attachment lifetime 3670, policy, prevent out received also exemptions Congress. fallacy Government's argument premise beneficiary. concluded seen fit none except Thus problem here giving effect exemption imposes precisely those Affirmed. 12 BLACK, whom CHIEF JUSTICE WHITTAKER join, dissenting. 13 concerned suit party my judgment mistake laws several bound vary widely responsibility transferees obligations their transferors. Therefore application leads anomalous result will though they stand position. I believe uneven characterized 'a nationwide scheme taxation,' Burnet Harmel, 287 103, 53 74, 77, 77 199, thoroughly unwise required Constitution, compelling practical considerations. 14 view, uniform plainest congressional mandate contrary.* Where standards transferor themselves controlling rules fairly implement collection government revenues. 838; Standard Rice 323 106, 145, 89 104; Oil 332 301, 67 1604, 2067; Priebe Sons, Inc., 407, 123, 92 32; Textile Workers Union America Lincoln Mills Alabama, 353 448, 912, 972. can hardly denied imposition regarded extremely desirable country. Indeed who framed Constitution deemed important 'all Duties, Imposts Excises (levied Congress) throughout States.' Art. I, 8. 9. Taxpayers treated equally without regard fortuity residence; additional complication inconvenience administration already complex system certain follow attempt differing ought avoided, if possible. Here, never directed legislative history 1926 certainly falls far short effect. general taxes, few instances apparently more favorable Commissioner. Both Senate House Committees emphasized simply provision previously 30; 43—44. And Conference Committee went express hope newly created gradually All consistent notion decisive; anything, indicates contrary. added Court, measuring up expectations Committee, persistently endeavored develop despite opposition Courts Appeals. See, Muller 678; Leary 18 139; Bales 22 355; 16 hold, matter receives given fair consideration received. rule heretofore basis Pearlman 153 560; Updike 913; long-standing antecedents traced back, part, noted Story Wood Drummer, Fed.Cas. 435, 17,944. operate evasion, yet impose unfair burden transferees. 17 Turning case, proceeds, purposes pass Here appears satisfy Mrs. Stern, responsible just died. provides: '(a) Method collection. amounts following liabilities shall, hereinafter provided, assessed, (including delinquency payment after demand, authorizing distraint proceedings court collection, prohibiting claims suits refunds): '(1) Transferees. interest, amounts, additions law) chapter. '(f) Definition 'transferee'. As used section, term 'transferee' includes heir, legatee, devisee, distributee.' 90, 91. followed own 16, part Other 641; 675. hand, entire proceeds. 900 originally enacted correlative both decedent. 1939 'contains comparable 827(b) (26 827(b)) 'beneficiary, included gross (811(f), 811(f))." 646. Revised Statutes provided: '297.140 Life benefit married woman; A person expressed of, duly assigned, made payable to, woman, her, benefit, whomsoever made, inure separate children, independently husband effecting transferring '(2) woman may, consent husband, contract, for, take health loss disablement accident. estate, free claim others. '(3) If mentioned equal paid, thereon, limitations. '297.150 another; When effected some himself insurable therein, lawful thereof, representatives, entitled representatives same. Subject limitations, company issuing discharged thereon accordance terms, unless, payment, written behalf specification claimed, claiming recover creditors.' '(A)s often occasion point out, revenue construed light purpose establish taxation application. Hence taken control limitation unless language necessary implication involved makes dependent law.' Pelzer, 312 399, 402—403, 61 659, 661, 85 913. Of course consulted interests actually has. once thus established, consequence Watson 345 544, 73 848, 97 1232; Morgan 309 78, 60 424, 84 585; 199.

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