Court Opinion

ID: 4630299
Source: CourtListenerOpinion
Date Created: 2020-11-21 03:07:11.736683+00
Date Added: 2024-06-11T07:57:31.489208
License: Public Domain

Harold W. Laque, Petitioner v. Commissioner of Internal Revenue, RespondentLaque v. Comm'rDocket No. 3711-68United States Tax Court54 T.C. 133; 1970 U.S. Tax Ct. LEXIS 224; February 4, 1970, Filed *224 Decision will be entered for the respondent.  Deduction claimed on income tax return for gifts to spouse as evidenced by the filing of a Form 709 gift tax return.  Held, gifts to spouse are commendable but nondeductible.  August L. Lunquist, for the petitioner.Charles L. Dunlap, for the respondent.  Sterrett, Judge.  STERRETT*133  Respondent determined a deficiency in the income tax of the petitioner for the calendar year 1966 of $ 1,040.76.  The sole issue for decision is whether respondent erred in disallowing a deduction of $ 5,396, which petitioner designated as a "Form 709" deduction, for gifts to petitioner's wife.This case was tried with Prudencia P. Laque, T.C. Memo. 1970-28, due to the similarity of the issues involved.FINDINGS OF FACTSome of the facts were stipulated and are so found. *225  Harold W. Laque (hereinafter referred to as petitioner) resided with his wife in Millersville, Md., at the time his petition was filed herein.  He filed his individual Federal income tax return for the calendar year 1966 at the Internal Revenue Service Center in Philadelphia, Pa.During 1966 petitioner and his wife, Prudencia P. Laque (hereinafter referred to as Prudencia), maintained a joint checking account numbered XXX-733-83-6 with the Maryland National Bank in Glen Burnie.  Petitioner alone made deposits in this account.During 1966 Prudencia withdrew $ 5,396 from the above-described account.  Petitioner had placed no restriction on Prudencia's right to make such withdrawals. She used the funds to pay various personal and living expenses such as grocery bills and mortgage payments on their house.During 1966 petitioner and Prudencia maintained another joint bank account, numbered X5262 with the Farmer's National Bank.  During the year Prudencia earned approximately $ 5,400 which she deposited in this account.  Of these funds petitioner withdrew approximately $ 3,200.  1*226  On his individual income tax return for the taxable year 1966 petitioner deducted the amount of $ 5,396 as a "Form 709" deduction.  In his statutory notice respondent disallowed the deduction, stating: "(a) The claimed deduction of $ 5,396.00 for a gift to your wife is not allowable as a deduction in [sic] your income tax return."*134  OPINIONThis case and two companion cases, Prudencia P. Lague, T.C. Memo 1970-28">T.C. Memo. 1970-28, and Charles E. Parsons, T.C. Memo. 1970-29, all involve the same issue of first impression, which is understandable.  Prudencia and Harold, the petitioner herein, are husband and wife.The salient facts of these cases are the same and are the result of the advice of a tax consultant who certainly must be deemed ingenious.  In each case one spouse would deposit in a joint checking account a large part or all of his or her earnings.  The nondepositing spouse would then make all the withdrawals using said amounts to pay for his or her own expenses and those of the children.  In the case of the Laques this obviously necessitated two joint checking accounts, the husband depositing in one and the wife in the*227  other.The novel twist to this plan was that the depositing spouse (the Laques filed separate returns) deducted on his or her income tax return the amount withdrawn as a gift to his or her spouse. The deduction was labeled as a Form 709 deduction.While one can certainly sympathize with the philosophy that is apparent in the claiming of such a deduction for gifts to a spouse, unfortunately, the claim must be denied.The Form 709, which petitioners assert as their basis for taking the deduction, is a gift tax form on which all gifts over $ 3,000 must be reported.  The form is to be used to compute one's gift tax liability and, unfortunately for petitioners, has nothing to do with computing one's income tax liability.  We are unable to find any provision in our Federal income tax laws under which the gifts would be deductible.Petitioner's second argument also deserves but short shrift.  On brief he has advanced some vague contentions of unconstitutionality.  He appears to be arguing that since Congress has permitted others to deduct charitable contributions petitioner is being discriminated against because he cannot deduct gifts to his spouse and that this violates his right to equal*228  protection under the law.The fallacy in this logic is patent.  No taxpayer may deduct gifts made to his or her spouse and all taxpayers are entitled to a deduction for charitable contributions if the requirements of section 170 of the Internal Revenue Code of 1954 are met.  It follows, a fortiori, that in this regard all taxpayers are treated equally.In accordance with the above,Decision will be entered for the respondent.  Footnotes1. See our decision in Prudencia P. Laque, T.C. Memo. 1970-28↩, with respect to this account.