Court Opinion

ID: 4496170
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:14:42.940047+00
Date Added: 2024-06-11T15:04:03.508286
License: Public Domain

Mellott,
dissenting: The deceased died January 23, 1921. The petitioners were appointed administrators with the will annexed June 6, 1922. The additional tax was assessed August 16, 1922. December 19, 1923, petitioners as administrators, distributed to themselves as sole beneficiaries all the property of the estate, which the opinion of the majority finds to be “in excess of the tax liability of the estate.”
The tax was a tax against the estate. It became due and payable one year after decedent’s death. (Sec. 406, Revenue Act of 1921.) The interest was “added as part of the tax.” (Sec. 406, supra.) The tax, including the interest, was “a lien for ten years upon the gross estate of the decedent.” (Sec. 409, Revenue Act of 1921.)
*885When petitioners received all the assets of the estate they took them cum onere. They were transferees and the property in their hands was impressed with a trust for the payment of the tax. (Capps Manufacturing Co. v. United States, 15 Fed. (2d) 528, and cases cited.) Even in the absence of a statutory provision, interest and penalties are part of the tax and may be collected from the transferee. (Coca-Cola Bottling Co., 22 B. T. A. 686; Louisiana & Arkansas Railway Co., 28 B. T. A. 158; aff'd., 70 Fed. (2d) 286.)
Petitioners paid no interest upon an indebtedness of theirs. The debt was the tax of the estate, together with the interest “added as part of” it. It is immaterial that suit was brought against them on the theory that their liability arose because they, as executors, had distributed the property of the estate. The gravamen of the action was to collect the tax due the Government, which included the interest. That is what was collected from the petitioners. (Cf. I. T. 1424, I-2 C. B. 101.)
I am of the opinion that the deficiency should be approved.