Court Opinion

ID: 9443229
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:15:04.246824+00
Date Added: 2024-06-11T17:29:25.019828
License: Public Domain

RIVES, Circuit Judge
(dissenting).
It seems to me that both in Alexander v. Commissioner, 5 Cir., 194 F.2d 921, and in the present case, this court has adopted the test for validity vel non of a family partnership recommended by Mr. Justice Frankfurter in his concurring opinion rather than that prescribed by the Court in Commissioner v. Culbertson, 337 U.S. 733, see pages 742, 751, 753, 69 S.Ct. 1210, at pages 1214, 1218, 1219. I concurred specially in the opinion in the Alexander case and would repeat here what I said there. In footnote 6, 337 U.S. on page 739, 69 S.Ct. on page 1213 of its opinion in the Culbertson case the Supreme Court noted that a man hardly becomes a partner in the conventional sense merely because he might have done so had he not been called into the service. That observation has direct application to a determination of whether William validly became a partner on the eve of his departure for Army service. Inez was subject to a call even more compelling, that of giving birth to and nurturing an infant daughter. Though we may consider the reminder unnecessary, as we said in Culbertson v. Commissioner, 5 Cir., 194 F.2d 581, we should nevertheless remember that the Supreme Court did say in the Culbertson case: “The vagaries of human experience preclude reliance upon even good faith intent as to future conduct as a basis for the present taxation of income.” 337 U.S. 740, 69 S.Ct. 1213. During the two year period William worked at the store for only about two weeks, while Inez was preoccupied with the baby and as her father testified:
“A. She worked some; sometimes we got in a tight, she’d come in there and help us, maybe, but her hands were full with other things.
“Q. So that she was busy with the family, rather than working in the business during those two years?
“A. Yes, sir.”
In the two fiscal years here involved, I think that the income was earned by the capital, services and skill of the father alone. Drawing income from the partnership is but a small part of the present conduct of the enterprise, and if that feature alone can convert a future intention into a present reality, then the Supreme Court’s admonition in Culbertson, supra, will have little practical effect. My brothers are doubtless right in saying, “The father wanted William and his wife and Inez and her husband to know that they would have something to come back to after the war was over.” That is the time clearly, it seems to me, when it was intended that William and Inez would join “in the present conduct of the enterprise.” I would affirm the decision of the Tax Court and therefore respectfully dissent.