Court Opinion

ID: 9660698
Source: CourtListenerOpinion
Date Created: 2023-08-23 22:18:37.185232+00
Date Added: 2024-06-11T18:14:21.392551
License: Public Domain

MADDEN, Judge
(dissenting in part).
I do not agree with the court’s conclusion that the plaintiff may recover the tax, penalty, and interest assessed and paid for the year 1944. That conclusion means that the court is not satisfied that the plaintiff did not have, at the beginning of the 1944 tax year, approximately $200,000 in assets. If he did have that amount, then the Commissioner of Internal Revenue’s determination that his net worth increased during 1944 by an amount which justified the assessment made, was wrong.. The court does not, of course, decide that it was wrong. It only decides that it has not been proved that it was right. This result is reached because, the normal period of the statute of limitations having elapsed before the 1944 deficiency was assessed, the Government had the burden of proving that the plaintiff’s return for 1944 understated his proper tax by at least 25 percent.
I think the plaintiff has not given us all the evidence that he could have given us about his assets and his income. It seems incredible that a person who was carrying on a successful business, who, in addition, had substantial commercial and savings bank accounts and a considerable quantity of bonds, notes, and stocks, could not, if he would, tell us what else he had and where he had it. Vague and indefinite statements about prodigious quantities of money in jars, money belts and pockets, with no real explanation as to how or when the money got there, or why it was removed from those receptacles and placed where other people place their valuables, during the tax years in question, do not ring true. The net result may be that the plaintiff, merely by keeping silent and saying to the tax authorities, “You have the burden of proof; I am the only one who knows the facts and I won’t tell you,” has his Government at his mercy.
I think the burden which is on the Government when it attempts to apply Section 275(c) of the Internal Revenue *161Code is the burden of going forward with the evidence. This it did by showing what assets the plaintiff had at the beginning of the 1944 year, in those places where people ordinarily keep their assets. Then the plaintiff could, of course, show that he had other assets which he kept in unusual places. Instead of showing that, he tells us a vague story about total assets of $400,000, most of which were not to be found in places where valuables are ordinarily kept. If the court had believed the plaintiff’s testimony it would have concluded that he owed no income taxes for any of the years in question. It obviously did not believe his testimony. But instead of disregarding it as unworthy of belief, it merely discounted it by some two-thirds.
I see no reason for this treatment of the case. I think that, as the proof stands, and regardless of presumptions of correctness, and burdens of proof, the only trustworthy evidence supports the assessments made by the Commissioner of Internal Revenue. If the real facts are otherwise, our lack of knowledge of them is due to the refusal of the plaintiff to enlighten us.