Source: https://m.openjurist.org/380/us/678
Timestamp: 2019-07-23 04:52:23
Document Index: 648372693

Matched Legal Cases: ['§ 2042', '§ 2042', '§ 2042', '§ 2042', '§ 20', '§ 81', 'Art. 25', 'Art. 25', 'Art. 25', 'Art. 27', 'Art. 32', '§ 402', '§ 402', '§ 302', '§ 811']

380 US 678 Commissioner of Internal Revenue v. Estate L Noel H M | OpenJurist
380 U.S. 678 - Commissioner of Internal Revenue v. Estate L Noel H M
380 US 678 Commissioner of Internal Revenue v. Estate L Noel H M
85 S.Ct. 1238
14 L.Ed.2d 159
ESTATE of Marshal L. NOEL, Deceased, William H. Frantz and Ruth M. Noel, Executors.
John B. Jones, Jr., Washington, D.C., for petitioner.
This is a federal estate tax case, raising questions under § 2042(2) of the Internal Revenue Code of 1954, 26 U.S.C. § 2042(2) (1958 ed.), which requires inclusion in the gross estate of a decedent of amounts received by beneficiaries other than the executor from 'insurance under policies on the life of the decedent' if the decedent 'possessed at his death any of the incidents of ownership, exercisable either alone or in conjunction with any other person. * * *'1 The questions presented in this case are whether certain flight insurance policies payable upon the accidental death of the insured were policies 'on the life of the decedent' and whether at his death he had reserved any of the 'incidents of ownership' in the policies.
In 1929, 36 years ago, the Board of Tax Appeals, predecessor to the Tax Court, held in Ackerman v. Commissioner, 15 B.T.A. 635, that 'amounts received as accident insurance' because of the death of the insured were includable in the estate of the deceased.2 The Board of Tax Appeals recognized that 'there is a distinction between life insurance and accident insurance, the former insuring against death in any event and the latter * * * against death under certain contingencies * * *.' The Court of Appeals in the case now before us considered this distinction between an 'inevitable' and an 'evitable' event to be of crucial significance under the statute. The Board of Tax Appeals in Ackerman did not, stating 'we fail to see why one is not taken out upon the life of the policy-holder as much as the other. In each case the risk assumed by the insurer is the loss of the insured's life, and the payment of the insurance money is contingent upon the loss of life.' This view of the Board of Tax Appeals is wholly consistent with the language of the statute itself which makes no distinction between 'policies on the life of the decedent' which are payable in all events and those payable only if death comes in a certain way or within a certain time. Even were the statutory language less clear, since the Board of Tax Appeals' Ackerman case it has been the settled and consistent administrative practice to include insurance proceeds for accidental death under policies like these in the estates of decedents. The Treasury Regulations remain unchanged from the time of the Ackerman decision3 and from that day to this Congress has never attempted to limit the scope of that decision or the established administrative construction of § 2042(2), although it has re-enacted that section and amended it in other respects a number of times.4 We have held in many cases that such a longstanding administrative interpretation, applying to a substantially re-enacted statute, is deemed to have received congressional approval and has the effect of law. See, e.g., National Lead Co. v. United States, 252 U.S. 140, 146, 40 S.Ct. 237, 239, 64 L.Ed. 496; United States v. Dakota-Montana Oil Co., 288 U.S. 459, 466, 53 S.Ct. 435, 438, 77 L.Ed. 893. We hold here that these insurance policies, whether called 'flight accident insurance' or 'life insurance,' were in effect insurance taken out on the 'life of the decedent' within the meaning of § 2042(2).
'The value of the gross estate shall include the value of all property—
26 CFR § 20.2042—1(a)(1). See also Treas.Reg. 105 (1939 Code), § 81.25; Treas.Reg. 80 (1934 ed.), Art. 25; Treas.Reg. 70 (1926 ed. and 1929 ed.), Art. 25; Treas.Reg. 68 (1924 ed.), Art. 25; Treas.Reg. 63 (1922 ed.), Art. 27; and Treas.Reg. 37 (1921 ed.), Art. 32.
Section 2042 was first enacted as § 402(f) of the Revenue Act of 1918, c. 18, 40 Stat. 1057, 1097—1098. This section was re-enacted in § 402(f) of the Revenue Act of 1921, c. 136, 42 Stat. 227, 278—279; in § 302(g) of the Revenue Act of 1924, c. 234, 43 Stat. 253, 304—305, and the Revenue Act of 1926, c. 27, 44 Stat. 9, 70—71; and in § 811(g) of the Internal Revenue Code of 1939.