Court Opinion

ID: 4483854
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:16:20.446217+00
Date Added: 2024-06-11T15:04:08.048541
License: Public Domain

Chabot, J., dissenting: The majority conclude that the transfers here at issue are not subject to tax under section 2501(a)(1),1 even though the language of sections 2511(a)2 and 2512(b)3 literally encompasses these transfers. The reasons presented in the majority opinion— (1) Have the effect of repealing several provisions of the Internal Revenue Code; (2) Are warranted by neither the Code, the legislative history, nor prior Court rulings; and (3) Are likely to create unwarranted confusion for the future. Accordingly, I respectfully dissent. The| majority opinion (p.258 supra) recapitulates “the key facts before us in order to carefully circumscribe the parameters of our holding.” However, the majority do not simply reach a result on a state of facts. In response to the statute’s command (sec. 7459(b)),4 the majority set forth their reasons. If these reasons truly justify the result reached by the majority in this case, then the same result should obtain in other sets of facts to which these stated reasons have equal application.5 For example, although the “key facts” are stated to include the fact that “the largest portion of petitioner’s support was on behalf of candidates for local office in Kansas City, Kans.,” we may safely assume that the majority would reach the same result if the largest portion of support was on behalf of candidates for State office in Maine or California. Under these circumstances, it is necessary to examine the reasons set forth by the majority, and to weigh the consequences of acting in accordance with these reasons. The majority opinion (p. 258 supra) sets forth standards for exclusion of transfers from the gift tax, as follows: These facts do not suggest a gift to the candidate, but the use of petitioner’s resources to promote the social framework petitioner considered most auspicious to the attainment of his objectives in life. Petitioner focused on the social structure most conducive to his economic aspirations; others may focus on a social structure advancing their own notions of social justice, or conditions they deem essential for world peace or public order. In either ease, in the particular circumstances before us, the individual candidate may generally be viewed, for purposes of the gift tax, as the means to the ends of the contributor. I. Implied Repeal of Code Provisions The majority repeal (or at least make into surplusage) much of section 2522(a) of the Internal Revenue Code of 1954 and its predecessors, section 1004(a)(2) of the Internal Revenue Code of 1939, section 505(a)(2) of the Revenue Act of 1932, and section 321(a)(2) of the Revenue Act of 1924. The majority repeal the restrictive language added to these provisions by section 201(d)(4)(C) of the Tax Reform Act of 1969 and section 517(a) of the Revenue Act of 1934. Section 2522(a)6 provides for deductions from the gift tax in the case of “charitable” gifts. (Section 2522(b) provides similar rules as to gifts by nonresident aliens.) The charitable gift deduction also was provided by section 321(a)(2) of the Revenue Act of 1924, section 505(a)(2) of the Revenue Act of 1932, and section 1004(a)(2) of the Internal Revenue Code of 1939. Analysis of these provisions indicates that, in substantially all cases, a transfer that would qualify for gift tax deduction as a charitable contribution to a governmental body, to a charitable organization, or to a fraternal organization, also would qualify under the majority opinion in the instant case as not being a gift. If a transfer does not constitute a gift, then it appears to be a useless act to provide for a deduction of the amount of the transfer. Consequently, it appears that the charitable contribution deduction provisions (at least, pars. (1), (2), and (3) of sec. 2522(a)) are impliedly repealed or made surplusage by the language of the majority opinion set forth above. Since the majority opinion takes the position that this was the law from the start of the gift tax, it appears that the charitable gift tax deduction was surplusage at all times during the history of the gift tax, thus impliedly making surplusage the predecessors of section 2522(a), as well. (See C. Blake McDowell, Inc. v. Commissioner, 71 T.C. 71 (1978).) This is contrary to the “settled position” of the Court; a change in such a “settled position” may well be “inappropriate, absent a change in the statute.” In M. D. Thatcher Estate Co. v. Commissioner, 38 B.T.A. 336 (1938), the Board redetermined a deficiency in gift tax under the Revenue Act of 1924. In doing so, the Board focused on both section 319 of the 1924 Act (predecessor of section 2501) and section 321(a)(2) of the 1924 Act (predecessor of section 2522(a)). The Board concluded that a transfer for “civic and philanthropic uses” was deductible under the “charitable contribution” provisions in section 321(a)(2) of the 1924 Act. The Board thought it helpful, in arriving at its conclusion, to note (38 B.T.A. at 343) that— In Ould v. Washington Hospital, supra [95 U.S. 303], a charitable use is defined as follows: A charitable use, where neither law nor public policy forbids, may be applied to almost anything [sic] that tends to promote the well-doing and well-being of social mean [sic]. If the Board could have forecast the test set forth in the majority opinion, it would not have needed to consider section 321(a)(2) of the 1924 Act; it could have stated that a transfer for civic and philanthropic uses is a “use of [the donor’s] resources to promote the social framework [those directing the donor] considered most auspicious to the attainment of [their] objectives in life.” Those directing the donor “may focus on a social structure advancing their own notions of social justice, or conditions they deem essential for world peace or public order. In either case, in the particular circumstances before us, the [donee organization] may generally be viewed, for purposes of the gift tax, as the means to the ends of the contributor.” The Board could have concluded that, therefore, the transfer was not a transfer by gift, within the meaning of section 319 of the 1924 Act. Two years later, in Faulkner v. Commissioner, 41 B.T.A. 875 (1940), the Board (four members dissenting) sustained a determination by the respondent that a transfer by Mary duPont Faulkner to the Birth Control League of Massachusetts was subject to gift tax under the Revenue Act of 1932. The majority in that case concluded that the league’s purposes included the influencing of legislation to such an extent that the league was not a permissible donee under section 505(a)(2)(B) of the Revenue Act of 1932 (predecessor of section 2522(a)(2)), as amended by section 517(a) of the Revenue Act of 1934. In a separate memorandum decision, the Board sustained a disallo-wance of an income tax deduction. The income tax case was appealed and reversed (112 F.2d 987 (1st Cir. 1940)), on the ground that the transfer was for the use of the Brookline Mothers’ Health Office, which had an identity sufficiently separate from the league to be an eligible donee. Whereupon, the Board modified its earlier opinion in the gift tax case to allow the deduction (42 B.T.A. 1019). Under the teaching of the majority in the instant case, the Board should have ruled for Mrs. Faulkner in the gift tax case on first consideration, since it was clear that both the league and the health office were means to the end of Mrs. Faulkner in improving the social structure to advance her notions of social justice. Such a transfer, the majority tell us, is not even a gift for gift tax purposes. More recently, the Court struggled with these same questions, holding that section 1004(a)(2)(B) of the Internal Revenue Code of 1939 (predecessor of section 2522(a)(2)) permitted a gift tax deduction for a transfer for the use of the Kentucky Social Welfare Foundation (Davis v. Commissioner, 22 T.C. 1091 (1954)), but did not permit gift tax deductions for transfers to the Foundation for World Government (Estate of Blaine v. Commissioner, 22 T.C. 1195 (1954)). In Blaine, the donee organization was regarded by the respondent as exempt from income tax under section 101(8)7 of the Internal Revenue Code of 1939 (predecessor of section 501(c)(4)), as a “social welfare” organization. The Court concluded that Mrs. Blaine’s “dominant aim was to organize a foundation to assist in bringing about a world government as rapidly as possible.” Under the standard enunciated in the majority opinion in the instant case, the Blaine transfers were not subject to the gift tax because, clearly, they were made to an organization that Mrs. Blaine viewed as the means to her end of advancing conditions she deemed “essential for world peace or public order.” Apart from the implied general repeal of the charitable gift provisions, the majority’s approach effects an implied repeal of the amendment made by the Revenue Act of 1934, which provided that a charitable organization would no longer be a qualified donee under the gift tax deduction provision if a “substantial part of the activities of [the organization] is carrying on propaganda, or otherwise attempting, to influence legislation” (sec. 517, Pub. L. 73-216, 48 Stat. 760). Since it is clear that (under the standards set forth by the majority herein) attempting to influence legislation can cause a transfer to be excluded from the gift tax, there is no need to disqualify an organization as a charitable gift donee merely because of excessive lobbying. Indeed, if the transfer is to an organization which has lost its charitable status because of excessive lobbying, it would appear that under the majority’s approach that fact alone should be sufficient to make a prima facie case that the transfer is excludable from gift tax. It is even more clear that the majority’s approach impliedly repeals the amendment by the Tax Reform Act of 1969 which provides that a charitable organization loses its gift tax qualified donee status if it intervenes “in (including the publishing or distributing of statements) any political campaign on behalf of any candidate for public office” (sec. 201(d)(4)(C), Tax Reform Act of 1969, Pub. L. 91-172, 83 Stat. 75). Indeed, the very transfers dealt with in the instant case are, and are intended to be, interventions in political campaigns on behalf of candidates for public office. It is obviously useless to disqualify an organization from being an eligible donee under the charitable gift-deduction provision merely because its activities are precisely the sort which justify a complete exclusion from the gift tax.8  II. No Authority in the Statute, Legislative History, or Prior Court Rulings (A) The Statute The Congress has provided by statute for a tax “on the transfer of property by gift” (sec. 2501(a)(1), set forth at n. 1 supra) and has instructed us by statute that “Where property is transferred for less than an adequate and full consideration in money or money’s worth, then the amount by which the value of the property exceeded the value of the consideration shall be deemed a gift, and shall be included in computing the amount of gifts made” (sec. 2512(b), set forth at n. 3 supra, emphasis supplied). The majority implicitly concede that the letter of the statute would impose the tax. The statute, as in effect during the taxable periods before us, provided a number of exclusions and deductions as follows: (1) Section 2501(a)(2) (relating to transfers of intangible property by nonresident aliens); (2) Section 2517(a) (relating to joint and survivor annuity-elections under certain tax-qualified plans and certain other arrangements); and (3) Section 2522 (relating to deductions for charitable and similar gifts). In addition, the statute provided for annual per-donee exclusions (sec. 2503(b)) and lifetime deductions (sec. 2521). The statute provided no exclusion or deduction for “political contributions,” as the term is used by the majority herein, except to the extent that the majority’s opinion encompasses section 2522, as described above. Indeed, for the taxable year 1970 and the taxable periods falling within 1971, the statute specifically provided (sec. 2522(a)(2), as amended by sec. 201(d)(4)(C), Tax Reform Act of 1969) that if a. donee organization participates or intervenes in political campaigns on behalf of candidates for public office, then the donor cannot deduct gifts made to that otherwise eligible donee organization. Thus, the statute does not authorize the exclusion which the majority would grant — indeed, the majority point to no authority in the language of the statute. Instead, the majority rely upon a statement in the opinion of the Supreme Court in Holy Trinity Church v. United States, 143 U.S. 457, 459 (1892), for authority to depart from the language of the statute where it is “at war with its purpose and history.” As the analysis in part I of this dissent shows, the deduction for charitable gifts was part of the gift tax legislation when the gift tax was first enacted in 1924; it was part of the legislation when the gift tax was resurrected in 1932; and it has continued in essentially similar form until now. Litigation over the years has been founded on the assumption that transfers, of the sort that the majority now describe as not being subject to the tax, were transfers subject to the tax. That litigation focused on whether the transfers were deductible under the narrower rules of the charitable gift deduction. Under these circumstances, I would conclude that the majority’s position is the one at war with the statute’s purpose and history. (B) The Legislative History The majority focus on the expressed purpose of backstopping the estate tax, the requirement of “donative intent,” and a published ruling which “makes it clear that respondent recognizes campaign contributions are intended to advance the campaign, not personally benefit the candidate.” P. 259 supra. As to backstopping the estate tax, there are numerous estate tax cases involving bequests which, in the language of the majority, “focus on a social structure advancing [the decedent’s] notions of social justice, or conditions [the decedent deemed] essential for world peace or public order.” These cases have held such bequests are not deductible from a decedent’s gross estate as transfers for public, charitable, or religious use under section 2055(a) or its predecessors.9 And yet the majority are, by their holding, exempting transfers from the gift tax that if made at death are subject to the estate tax. Further, if we are to interpret the two transfer taxes in a similar manner, the majority’s rationale could be extended to exempt “social framework” bequests from the estate tax as well. This would have the result of making parts of section 2055(a) surplusage.10  As to “donative intent,” the Supreme Court has rejected the requirement of “donative intent” in favor of a broad and comprehensive definition of the term “gift.” In Commissioner v. Wemyss, 324 U.S. 303, 306 (1945), the Court stated: Had Congress taxed “gifts” simtpliciter, it would be appropriate to assume that the term was used in its colloquial sense, and a search for “donative intent” would be indicated. But Congress intended to use the term “gifts” in its broadest and most comprehensive sense. * * * Congress chose not to require an ascertainment of what too often is an elusive state of mind. For purposes of the gift tax it not only dispensed with the test of “donative intent.” It formulated a much more workable external test, that where “property is transferred for less than an adequate and full consideration in money or money’s worth,” the excess in such money value “shall, for the purpose of the tax imposed by this title, be deemed a gift ***.’’*** [Citations omitted.] Finally, as to whether personal benefit to the candidate is required, as distinguished from benefit to the campaign, it is not necessary for taxability that the donee be benefited in any materialistic sense. Nor is it necessary for taxability that the transfer be directly to the donee, if the transfer benefits the donee. E.g., sec. 25.2511-1(h)(3), Gift Tax Regs.; Skouras v. Commissioner, 14 T.C. 523 (1950), affd. 188 F.2d 831 (2d Cir. 1951). Further, the fact that the donor benefits from the transfer in that it furthers his purposes does not mean the transfer is not a gift, as long as the donor is not receiving “consideration in money or money’s worth.” Commissioner v. Wemyss, supra; Merrill v. Fahs, 324 U.S. 308 (1945); Estate of Hundley v. Commissioner, 52 T.C. 495 (1969), affd. per curiam 435 F.2d 1311 (4th Cir. 1971); Hrobon v. Commissioner, 41 T.C. 476, 498-502 (1964). In sum, the majority have combed the legislative history and have found nothing directly on point. From this, they conclude that the Congress did not intend to subject to the gift tax the transfers described in the majority’s standards. However, the absence of statements directly on point could just as easily lead to the conclusion that the Congress did not intend to exempt such transfers from the tax. The important point here is that a clear legislative history is necessary if we are to depart from the Congress’ enacted definition and statutory system of exclusions and deductions. Such clear expressions of intent have not been adduced by the majority. The legislative history does not support the majority’s analysis. (C) Prior Court Rulings The majority rely upon neither of the two court rulings most closely on point. The majority note that Stern v. United States, 436 F.2d 1327 (5th Cir. 1971), “supports and is consistent with the result we reach herein.” However, the majority choose to rely on neither the authority nor the reasoning of Stern. Similarly, the majority note that DuPont v. United States, 97 F.Supp. 944 (D. Del. 1951), which reached the opposite conclusion, dealt specifically in dictum with transfers to political parties. The majority dismiss the DuPont case as distinguishable.11  The relevant cases of this Court dealing with transfers described in the majority’s standard (M. D. Thatcher Estate Co. v. Commissioner, supra; Faulkner v. Commissioner, supra; Davis v. Commissioner, supra; Estate of Blaine v. Commissioner, supra) all conflict with the reasoning advanced by the majority. III. Confusion for the Future Firstly, as the majority note in passing (n. 5 in the majority opinion), the Congress has acted in this area. Section 14, Pub. L. 93-625,88 Stat. 2121,12 added paragraph (5) to section 2501(a), to read as follows: (5) Transfers to political organizations.— Paragraph (1) shall not apply to the transfer of money or other property to a political organization (within the meaning of section 527(e)(1)) for the use of such organization. This amendment (enacted Jan. 3,1975) applies to transfers made after May 7, 1974. The same act (sec. 10(a), 88 Stat. 2118) enacted section 527(e),13 referred to in section 2501(a)(5). The Congress has not otherwise modified section 2501 after the taxable periods before us, with respect to the transfers here at issue or transfers described in the majority’s standards. The question then arises as to whether the holding of this case applies to transfers made after May 7, 1974, or whether the holding is “good only for this train and this ride.” Note in this connection that, in order to qualify under the “pins and needles Act” rule, the transfer must be made to a political organization and that “political organization” is a term defined in detail in the statute. Secondly, if the majority’s standard applies after the “pins and needles Act,” the question arises as to the extent to which that standard repeals or makes into surplusage a number of provisions that have been enacted by the Congress, and the extent to which prior decisions of this Court have been implicitly overruled (e.g., Estate of Blaine v. Commissioner, supra) or made obsolete (e.g., M. D. Thatcher Estate Co. v. Commissioner, supra; Faulkner v. Commissioner, supra; Davis v. Commissioner, supra). The majority do not. rest their conclusion upon Stern v. United States, 436 F.2d 1327 (5th Cir. 1971), or section 25.2512-8, Gift Tax Regs., and have made no conclusory findings of fact which would compel the Stern result. Under these circumstances, it does not appear that it would be fruitful to examine, in dissent, what should be the effect of Stern on our decision in the instant case. Simpson, J., agrees with this dissenting opinion.  For 1967,1968, and 1970, the statute read as follows: SEC. 2501. IMPOSITION OF TAX. (a) Taxable Transfers.— (1) General Rule. — For the calendar year 1955 and each calendar, year thereafter a tax, computed as provided in section 2502, is hereby imposed on the transfer of property by gift during such calendar year by any individual, resident or nonresident. For 1971, the statute read as follows: SEC. 2501. IMPOSITION OF TAX. (a) Taxable Transfers.— (1) General rule. — For the first calendar quarter of the calendar year 1971 and each calendar quarter thereafter a tax, computed as provided in section 2502, is hereby imposed on the transfer of property by gift during such calendar quarter by any individual, resident or nonresident.   SEC. 2511. TRANSFERS IN GENERAL. (a) Scope. — Subject to the limitations contained in this chapter, the tax imposed by section 2501 shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible; but in the case of a nonresident not a citizen of the United States, shall apply to a transfer only if the property is situated within the United States.   For 1967,1968, and 1970, the statute read as follows: SEC. 2512. VALUATION OF GIFTS. (b) Where property is transferred for less than an adequate and full consideration in money or money’s worth, then the amount by which the value of the property exceeded the value of the consideration shall be deemed a gift, and shall be included in computing the amount of gifts made during the calendar year. For 1971, the statute read as follows: SEC. 2512. VALUATION OF GIFTS. (b) Where property is transferred for less than an adequate and full consideration in money or money’s worth, then the amount by which the value of the property exceeded the value of the consideration shall be deemed a gift, and shall be included in computing the amount of gifts made during the calendar quarter.   SEC. 7459. REPORTS AND DECISIONS. (b) Inclusion of Findings of Fact or Opinions in Report. — It shall be the duty of the Tax Court and of each division to include in its report upon any proceeding its findings of fact or opinion or memorandum opinion. The Tax Court shall report in writing all its findings of fact, opinions, and memorandum opinions.   Surely some consistency is appropriate in judicial applications of the law. The Congress, the taxpaying public, and the executive branch should be able to rely on our stated reasoning, notwithstanding Emerson’s strictures that— “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines. With consistency a great soul has simply nothing to do. He may as well concern himself with his shadow oh the wall. Speak what you think now in hard words and to-morrow speak what tomorrow thinks in hard words again, though it contradict every thing you said to-day. [R. W. Emerson, Self Reliance 21 (Peter Pauper Press 1967).]”   For 1967 and 1968, the statute read as follows: SEC. 2522. CHARITABLE AND SIMILAR GIFTS. (a) Citizens or Residents. — In computing taxable gifts for the calendar year, there shall be allowed as a deduction in the case of a citizen or resident the amount of all gifts made during such year to or for the use of— (1) the United States, any State, Territory, or any political subdivision thereof, or the District of Columbia, for exclusively public purposes; (2) a corporation, or trust, or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation; (3) a fraternal society, order, or association, operating under the lodge system, but only if such gifts are to be used exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals; (4) posts or organizations of war veterans, or auxiliary units or societies of any such posts or organizations, if such posts, organizations, units, or societies are organized in the United States or any of its possessions, and if no part of their net earnings inures to the benefit of any private shareholder or individual. [Emphasis supplied.] For 1970, the statute read as follows: SEC. 2522. CHARITABLE AND SIMILAR GIFTS. (a) Citizens or Residents. — In computing taxable gifts for the calendar year, there shall be allowed as a deduction in the case of a citizen or resident the amount of all gifts made during such year to or for the use of— (1) the United States, any State, Territory, or any political subdivision thereof, or the District of Columbia, for exclusively public purposes; (2) a corporation, or trust, or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office; (3) a fraternal society, order, or association, operating under the lodge system, but only if such gifts are to be used exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals; (4) posts or organizations of war veterans, or auxiliary units or societies of any such posts or organizations, if such posts, organizations, units, or societies are organized in the United States or any of its possessions, and if no part of their net earnings inures to the benefit of any private shareholder or individual. [Emphasis supplied.] For 1971, the statute read as follows: SEC. 2522. CHARITABLE AND SIMILAR GIFTS. (a) Citizens or Residents. — In computing taxable gifts for the calendar quarter, there shall be allowed as a deduction in the case of a citizen or resident the amount of all gifts made during such quarter to or for the use of— (1) the United States, any State, Territory, or any political subdivision thereof, or the District of Columbia, for exclusively public purposes; (2) a corporation, or trust, or community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office; (3) a fraternal society, order, or association, operating under the lodge system, but only if such gifts are to be used exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals; (4) posts or organizations of war veterans, or auxiliary units or societies of any such posts or organizations, if such posts, organizations, units, or societies are organized in the United States or any of its possessions, and if no part of their net earnings inures to the benefit of any private shareholder or individual. [Emphasis supplied.]   SEC. 101. EXEMPTIONS FROM TAX ON CORPORATIONS. The following organizations shall be exempt from taxation under this chapter— (8) Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes;   It should be noted, in this respect, that the 1975 statute referred to in note 5 of the majority opinion (sec. 14, Pub. L. 93-625, 88 Stat. 2121) makes the gift tax inapplicable only in certain limited circumstances— “a transfer of money or other property to a political organization (within the meaning of section 527(e)(1)) for the use of such organization.” Not all the transfers in the instant case appear to qualify as transfers to political organizations under the relatively narrow language of the 1975 Act. The 1975 Act is a far more narrowly drawn statute which does not impliedly repeal sec. 2522(a). The 1975 Act has an additional claim to legitimacy in that, unlike the majority opinion, the 1975 Act was enacted by the Congress.   E.g., Sharpe’s Estate v. Commissioner, 148 F.2d 179 (3d Cir. 1945), affg. 3 T.C. 612 (1944); Marshall v. Commissioner, 147 F.2d 75 (2d Cir. 1945), affg. 2 T.C. 1048 (1943), cert. denied 325 U.S. 872 (1945); Leubuscher v. Commissioner, 54 F.2d 998 (2d Cir. 1932), modifying 21 B.T.A. 1022 (1930); Krohn v. United States, 246 F. Supp. 341,345-348 (D. Colo. 1965); Hammerstein v. Kelley, 235 F. Supp. 60, 64-65 (E.D. Mo. 1964), affd. 349 F.2d 928, 930 (8th Cir. 1965); League of Women Voters of United States v. United States, 180 F. Supp. 379 (Ct. Cl. 1960), cert. denied 364 U.S. 822 (1960).   True, the majority concede that they are creating conflicts between the estate tax and the gift tax (p. 262 supra). However, the majority admit to such a conflict only in the case of “a legacy to a campaign fund.’' If the “social framework” standard established by the majority is the proper basis for deciding this case, and if that is so because that is necessary in order to backstop the estate tax, then the reader can reasonably conclude that the majority believe the “social framework” standard may also be the appropriate test for taxability under the estate tax.   I agree that DuPont is distinguishable in that the transfers there at issue were not made to or on behalf of candidates for public office. However, that is not sufficient to protect DuPont from the far-reaching effect of the standards proclaimed by the majority herein. It is evident from the DuPont opinion that the transfers there were made to further the purposes of the donee organization “ ‘to preserve private enterprise, private property and private initiative and American independence.’ ” (97 F. Supp. at 946.) The donor sought to improve economic conditions in this country and considered that he had profited from the improvement “to a much greater extent than the amount of the transfer.” (97 F. Supp. at 947.) Clearly, Mr. DuPont’s purposes would make the transfers not taxable under the standards set forth in the majority opinion herein.   This Act, which initially was passed by the House of Representatives as a tariff bill to allow duty-free imports of upholstery regulators, upholsterer’s regulating needles, and upholsterer’s pins, often is referred to as the “pins and needles Act.”   SEC. 527. POLITICAL ORGANIZATIONS. (e) Other Definitions. — For purposes of this section— (1) Political organization. — The term “political organization” means a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. (2) Exempt function. — The term “exempt function” means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any Federal, State, or local public office or office in a political organization, or the election of Presidential or Vice-Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. (3) Contributions. — The term “contributions” has the meaning given to such term by section 271(b)(2). (4) Expenditures. — The term “expenditures” has the meaning given to such term by section 271(b)(3).