Court Opinion

ID: 4497151
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:15:17.033747+00
Date Added: 2024-06-11T15:04:04.449601
License: Public Domain

Black,
dissenting: In my opinion, the only effective disclaimer executed by the taxpayer was the one which he executed in writing on May 6, 1936. Moreover, I think such is the effect of the holding of the Circuit Court of Oregon for the County of Multnomah in the proceeding entitled The First National Bank of Portland v. Mary Helen Clair et al.
The court in its decree, following certain findings of fact and conclusions of law, entered September 30, 1936, refers to only one disclaimer and that was the one which petitioner executed May 6, 1936. The court, speaking of tMs disclaimer, said: “And that the said Loyal B. Stearns, by a valid and legal instrument in writing, disclaimed, disowned and renunciated all rights, titles, or interests in or to the estate and/or income from the estate of Mary F. Stearns, deceased.”
It may well be that this disclaimer of May 6, 1936, which was unquestionably valid, divested petitioner of all interest in the income of the estate both retroactively and prospectively, as between the parties interested in the income under the will of Mary F. Stearns. The disclaimer could' not have any effect, however, on petitioner’s income tax liability for 1934 and 1935. The income tax liability of petitioner in those two years was fixed by rights and liabilities which existed in those two years and not by what took place in 1936.
The scheme of the income tax law is to levy income taxes on an annual basis. That proposition is so well established that no citation of authorities on that point seems necessary.
The majority opinion, speaking of the effect of a disclaimer, says: “Furthermore, it may operate retroactively so as to obliterate ab initio the rights which it disclaims.” (Citing authorities.) As already stated, that is doubtless true as between the parties, but not as to income tax liability.
For the reasons stated, I respectfully dissent from the majority opinion.
Smith, Murdock, Arnold, and Disnet agree with this dissent.