Court Opinion

ID: 9715651
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:11:27.794514+00
Date Added: 2024-06-11T18:23:36.699766
License: Public Domain

Beilfuss, J.
(dissenting). I respectfully dissent and believe the judgment of the circuit court should be affirmed.
Mr. and Mrs. Skaar, just like any other taxpayer, have a right to report their income for tax purposes in a manner most advantageous to them, provided, of course, their report is consistent with the truth.
I fully agree with the majority that:
“. . . transactions between husband and wife calculated to reduce family taxes should always be subjected to special scrutiny.” Commissioner v. Tower (1946), 327 U. S. 280, 291, 66 Sup. Ct. 532, 90 L. Ed. 670.
As I review the record, the facts do not lead to the conclusion that Mr. and Mrs. Skaar were attempting by design or artifice to create records or impressions for the purpose of avoiding the tax laws. Their everyday activities demonstrate their intention as clearly, if not more so, than a formal lawyer-like agreement.
As observed by the circuit court:
“Mrs. Skaar does a very substantial amount of farm labor each day. Twice a day she participates in the milking and feeding of the herd; takes care of the chickens; bales hay, drives the baler, and unloads hay; prepares the tobacco seed bed, planting the plants, helps with the tobacco harvest and with the stripping; and drives tractors. She estimated that probably she puts in 12 hours per day doing farm labor. Mr. Skaar is town chairman and chairman of the county drainage board which duties take him away from the farms considerably so she probably puts in more farm labor than he does. The commission, by its Finding of Fact No. 8, found that *103Mrs. Skaar ‘spent as much time or more than did the petitioner in the conduct of the farming operations.’
“Decision making in the management of the farms is done jointly by the Skaars after talking things over, such as buying new machinery, or when to sell the tobacco crop.
“The sale of milk constituted by far the greater portion of the gross farm income of the Skaars for each of the three years in question as shown by the income tax returns. In 1966 it accounted for $24,666.07 of a total of $33,884.95; in 1967, $28,551.83 of a total of $35,417.38; and in 1968, $32,733.22 of a total of $40,606.23. During these three years, and for some time prior thereto, the milk checks received have been payable to both Mr. and Mrs. Skaar with an ‘or’ between their names. These as well as all other farm income are deposited in the one joint checking account. On the other hand, the checks for sale of cattle are made out to him. Bills for farm expenses most generally came made out to Mr. Skaar alone but Mrs. Skaar pays them.”
The circuit court then concluded in its memorandum opinion:
“If the arrangement between Mr. and Mrs. Skaar was not technically a partnership, then no partnership information return probably was required because sec. 71.10 (3) (a), Stats., does not appear to cover joint ventures. In any event, the Skaars employed an attorney to prepare their income tax returns for the three years in question and it was his judgment, not theirs, which resulted in not filing partnership returns. It would be wholly unreasonable for the Commission to infer from such failure that the Skaars were not engaged in a joint venture whereby they were equal co-owners of all income derived from such venture.
“The Court finds that no rational basis exists for the Commission’s legal conclusion that the Skaars did not conduct their farming operations either as a partnership or a joint venture.”
I agree and would affirm.
I am authorized to state that Mr. Justice Robert W. Hansen joins in this opinion.