Court Opinion

ID: 4606671
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:39:03.193433+00
Date Added: 2024-06-11T07:53:25.004544
License: Public Domain

ELEANOR JANE ZEILE, EXECUTRIX, ESTATE OF EDWARD G. ZEILE, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Zeile v. CommissionerDocket No. 20094.United States Board of Tax Appeals20 B.T.A. 1039; 1930 BTA LEXIS 1978; September 29, 1930, Promulgated *1978  1.  The Commissioner is not estopped to reassert a deficiency theretofore abated by him.  2.  The whole of a community estate in California should be included in the gross estate of the deceased husband.  3.  The tax here involved is not barred by limitation.  Section 1400(b) of the Revenue Act of 1921, authorizes the collection of a tax under the 1918 Act, although the 1921 Act became effective in less than one year after the date of the decedent's death.  Peter Tum Suden, Esq., for the petitioner.  Frank T. Horner, Esq., for the respondent.  LOVE *1039  This proceeding is for the redetermination of a deficiency in estate tax in the amount of $506.54.  There are eight assignments of error, all of which may be presented in three propositions of law, as follows: *1040  1.  That the action of the Commissioner abating the deficiency, estops him from reasserting it.  2.  That only one-half of the community estate held in California should be included in the gross estate of the deceased husband.  3.  That the assessment and collection of the deficiency herein asserted is barred by limitation.  In the brief of counsel for petitioner*1979  a fourth proposition is presented to the effect that the estate-tax title of the 1918 Act was repealed by the Revenue Act of 1921, which latter act took effect prior to the accrual of the tax here involved, hence the saving clause of the 1921 Act (sec. 1400(b)) did not save this tax.  FINDINGS OF FACT.  Edward G. Zeile died on October 23, 1921.  He and his wife, Eleanor Jane Zeile, were residents of Calofornia, having intermarried September 7, 1884, and lived together as husband and wife to the date of his death.  All property owned by them, except $16,986 which is not involved in this proceeding, was community property under the laws of California.  Eleanor Jane Zeile was duly appointed executrix of the estate of Edward G. Zeile on November 9, 1921, and qualified and acted as such executrix.  She filed an estate-tax return on April 22, 1922.  She was advised by letter from the Internal Revenue Bureau on March 7, 1923, that her return had been audited and disclosed a deficiency in tax of $506.54.  As the result of some correspondence between the executrix and the Internal Revenue Bureau, on May 4, 1923, she filed a claim for abatement of the deficiency.  On March 23, 1925, the*1980  executrix was advised that her claim for abatement had been allowed in full, and that the Bureau conceded her contention that only one-half of the community estate should be included in the gross estate of the deceased husband.  On August 4, 1926, a deficiency notice was mailed petitioner, in which the deficiency of $506.54 originally asserted, was reasserted, and it is from that deficiency notice that this appeal is taken.  OPINION.  LOVE: We will discuss the law propositions in the order herein presented.  That the Commissioner is not estopped from reasserting a deficiency, theretofore abated by him, is now so well established by decisions of this Board, as well as by appellate courts, that we deem it unnecessary to cite authorities.  See . The action of the Commissioner in that respect is approved. *1041  In regard to the second proposition, we may safely say that regardless of what the community proposition may be adjudged to be, ultimately, in the seven other community property law States, the courts and this Board have held that the whole community property estate in California is under the control of the husband, *1981  and that the wife holds only an expectancy, realized only after the death of the husband, and that on his death the whole of such estate should be included in the gross estate of such deceased husband.  We are controlled by those decisions; hence, the action of the Commissioner on that question is approved.  See ; , with cases therein cited.  The third proposition is that the assessment and collection of the tax is barred by limitation.  The decedent died October 23, 1921; hence, the estate tax is governed by the Revenue Act of 1918, with certain provisions of subsequent acts affecting the 1918 Act.  The estate-tax title of the 1918 Act contains no limitation, and in no other section of that act appears a limitation period.  The estate-tax title of the 1921 Act contains no limitation provision, but section 1322 is a general statute of limitation embracing all internal revenue taxes, except those under section 250 of the 1921 Act, and provides a period of four years from date when such tax became due.  Under section 406 of the 1918 Act, the tax became due one year*1982  after date of death.  Therefore, the tax in the instant case became due on October 23, 1922.  Four years from that date was October 23, 1926.  The deficiency notice was mailed to petitioner on August 4, 1926.  Section 318(a) of the 1926 Revenue Act provides for the mailing of a deficiency notice if a deficiency be determined after the enactment of that act (February 26, 1926), to be governed by the provisions of section 308(a), which precludes an assessment until the matter be disposed of as provided in that section.  This tax is not barred by limitation.  We come, now, to consider the fourth proposition, raised for the first time in the brief on behalf of petitioner.  Ordinarily, an assignment of error, or any issue of fact or law, not raised in the pleadings, will not be considered.  However, the issue raised by the fourth proposition is, we believe, fundamental, and, if sound, would preclude the collection of any tax whatever in the instant case, and we therefore consider it.  It is the contention of counsel that, by reason of the fact that the Revenue Act of 1921 expressly repealed the Act of 1918 (reserving a limited saving clause), the tax liability of petitioner, if any ever*1983  existed, was thereby annulled.  He further contends that the saving clause in the 1921 Act does not save this tax.  Section 1400 of the Revenue Act of 1921 repeals parts of the 1918 Act, which parts include Title IV (Estate Tax).  Subdivision (b) *1042  of that section prescribes that "the parts of the Revenue Act of 1918 which are repealed by this Act shall (unless otherwise specifically provided in this Act) remain in force for the assessment and collection of all taxes which have accrued under the Revenue Act at the time such parts cease to be in effect, and for the imposition and collection of all penalties or forfeitures which have accrued or may accrue in relation to any such taxes." By reason of the fact that the tax in the instant case became due on October 23, 1922, and the 1921 Act became effective on November 23, 1921, counsel contends that the tax here in question had not accrued at the time of the enactment of the 1921 Act, and that the 1921 Act saved only such taxes as had then accrued.  It is apparent that the solution of the problem here presented hinges on the determination of what Congress meant in the use of the word "accrued" as used in the statute*1984  quoted above.  Counsel contends that the word accrued means due, and cites, as authority, ; ; ; to which may be added . The word "accrued" has no definite, fixed or crystallized meaning, as is apparent on an examination of Webster's dictionary.  It is often used in the sense of coming into existence, as the accrual of interest on a note from day to day, although demand for payment may not be made until the maturity of the note.  The exact issue here involved was presented to, and considered at some length in a supplemental opinion recently rendered by the Court of Claims in the case of ; certiorari denied, . We are in complete accord with the reasoning in that opinion.  See also . Judgment will be entered for the respondent.