Court Opinion

ID: 4497316
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:15:21.998966+00
Date Added: 2024-06-11T08:00:18.163601
License: Public Domain

*18OPINION.
Teussell :
The taxes here in' controversy are individual income taxes and are for the calendar year 1918. The statute levying such taxes is the Revenue Act of 1918, and section 223 of that Act provides:
That every individual having a net income for the taxable year of $1,000 or over if single or if married and not living with husband or wife, or of $2,000 or" over if married and living with husband or wife, shall mate under oath a return stating specifically the items of his gross income and the deductions and credits allowed by this title. If a husband and wife living together have an aggregate net income of $2,000 or over, each shall make such a return unless the income of each is included in a single joint return.
All of the income, except interest on Liberty bonds, and in one case of dividends on the stock of domestic corporations, and in the other of salary from Quachita Lumber Co., was produced by the business of the partnerships of which S. P. and T. L. Weaver were partners; neither of the wives had any separate estate or any partnership interest in the business of the partnerships as generally understood. However, the statutes of Louisiana contain provisions under which gains and profits accruing during the continuance of the marriage relation are regarded as the community property of husband and wife in equal parts. Portions of the *19Louisiana statutory provisions (Revised Civil Code), cited by tbe Attorney General in his opinion published as Treasury Decision 3138, are as follows:
Art. 2332. The partnership, or community of acquets or gains, need not be stipulated; it exists by operation of law, in all cases where there is no stipulation to the contrary.
Art. 2399. Every marriage contracted in this State, superinduces of right partnership or community of acquet's or gains, if there be no stipulation to the contrary.'
Art. 2402. The partnership or community consists of the profits of all the effects of which the husband has the administration and enjoyment, either of right or in fact, of the produce of the reciprocal industry and labor of both husband and wife, and of the estates which they may acquire during the marriage, either by donations made jointly to them both, or by purchase, or in any other similar way, even although the purchase be only in the name of the two and not of both, because in that ease the period of time when the purchase is made is alone attended to, and not the person who made the purchase.
Art. 2404. The husband is the head and master of the partnership or community' of gains; he administers its effects, disposes of the revenues which they produce, and may alienate them by an onerous title, without the consent and permission of his wife.
All persons involved in these appeals, in respect to their domestic and property relations, and the two partnerships, in respect of their businesses, were subject to and governed by the foregoing provisions of the Louisiana statutes. By virtue of the adoption of the Attorney General’s opinion as published in T. D. 3138, it appears to have become the settled practice in the Treasury Department to accept separate individual income-tax returns by husbands and wives in which the so-called community income may be equally divided between the two and income taxes computed upon such basis. It will be observed that the above-quoted article 2404 of the Louisiana statutes provides that “ the husband is the head and master of the partnership or community of gains; he administers its effects, disposes of the revenues which they produce, and may alienate .them by an onerous title, without the consent and permission of his wife.”
It thus appears that, under this statute, S. P. Weaver and T. L. Weaver possessed ample authority to manage, dispose of, and to alienate the gains and profits accruing to or produced by the business of Weaver Bros., or other enterprises in which they were interested, as they saw fit and in accordance with their own best judgment; that the authority to. administer and dispose of gains and profits includes the right and the duty to make income-tax returns required by the United States Revenue Acts; and -that when, *20on March 14, 1919, they prepared and filed forms of income-tax returns for the calendar year 1918 purporting to be made in accordance with section 223 of the Revenue Act of 1918, and in preparing such returns included therein all the items of gross income and allowable deductions pertaining to both themselves and their wives and the respective shares of the net income of the partnership of Weaver Bros, computed “ in accordance with the method of accounting regularly employed in keeping the books of such” partnership (Revenue Act of 1918, section 212(b)) such returns were not only the income-tax returns of S. P. and T. L. Weaver, respectively, but were also the joint returns of each husband and wife, respectively, as required by law.
The forms of returns filed on May 27, 1921, contain no facts concerning gross income or allowable deductions which were not contained in the returns made on March 15, 1919. ■ The forms last filed purported only to divide the same gross income and the same allowable deductions equally between husband and wife in each case. Such forms of return are simply amendments of the original joint returns and relate back to and become a part of the original joint return. The Board has held in the Appeals of National Refining Co. of Ohio, 1 B. T. A. 236; Mabel Elevator Co., 2 B. T. A. 517; and New York Trust Co., 3 B. T. A. 583, that amended returns, not being returns required by law, do not furnish a starting point for the running of the statute of limitations, and we are, therefore, brought to the conclusion that in each of the present cases the five-year statute of limitations provided for in section 277 (a) (2) of the Revenue Act of 1924 began to run on the 16th day of March, 1919, and that on the 12th day of March, 1925, the Commissioner was without authority of law to make assessments of any income tax for the year 1918 against either of the petitioners herein.

Order of redetermination will he entered on 15 days' notice, vmder Rule 50.