Court Opinion

ID: 4496169
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:14:42.934596+00
Date Added: 2024-06-11T15:04:03.507679
License: Public Domain

Morris,
dissenting: I disagree with the majority opinion in so far as it disallows the deduction of that part of the interest which accrued prior to the distribution of the assets of the estate by the petitioners. In my opinion the total interest paid by the petitioners is deductible. That conclusion is based solely on the nature of the petitioners’ liability under section 8467 of the Revised Statutes. The error in the majority opinion is in confusing the time at which the liability arises with the substance of that liability. Although under that section the petitioners did not become answerable in their own persons and estates until they distributed the assets of the estate without having satisfied the debts due the United States, the distribution made them personally liable for the debt, namely, the unpaid tax, and in addition any interest that had or would accrue to the time of payment. The excess over and above the tax is designated as interest by the statute, the judgment of the court was for the tax with interest, and the amounts claimed as a deduction were paid as such. The debt became the petitioners’ personal obligation and they were equally answerable under the above section for any excess which the statute adds as interest. The statute permits the deduction of all interest paid on indebtedness. Under 3467 this was the petitioners’ indebtedness, and the interest paid is therefore deductible.
Black and McMahon agree with this dissent.