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Dr. Irving S. Wright and Lois E. Wright v. Commissioner of Internal Revenue, 336 F.2d 121, 2d Cir. (1964)
Dr. Irving S. Wright and Lois E. Wright v. Commissioner of Internal Revenue, 336 F.2d 121, 2d Cir. (1964)
2d 121
Taxpayer, Lois Elliman Wright, is the widow of J. W. Findlay, who at the time
of his death in 1951 was a citizen of the United States and a resident of the
State of New York. After Mr. Findlay's death taxpayer married Irving S.
Wright, with whom she filed joint income tax returns for the years 1953
through 1958. The Commissioner of Internal Revenue determined deficiencies
in the petitioners' income taxes for each of the six years, based upon his
findings that income of Lois Wright of $50,000 in each of the years 1953, 1954
and 1955, and $13,500 in each of the years 1956, 1957 and 1958 had not been
reported in petitioners' returns. Thereafter appellants brought three petitions in
the Tax Court of the United States to review these several determinations, one
covering the returns of 1953 through 1955, one for the year 1956, and one for
the years 1957 and 1958, and now seek review of three decisions of the Tax
Court handed down upon a consolidated hearing in that court. The Findings of
Fact and Opinion below are reported at 39 T.C. 597 (1962). This case is a
companion case to that of Findlay v. C. I. R., 332 F.2d 620 (2 Cir. 1964).
2
Lois Wright and Helen Findlay each received $50,000 in 1953 and 1954 and in
1955 there was delivered to them $19,815.05 ($50,000 less $30,184.95
deducted in England for British death duties) under circumstances and pursuant
to agreements discussed in detail in our opinion in Findlay v. C. I. R., supra.
We follow that case. We affirm the Tax Court in its determination that the sums
of $50,000 received in 1953 and 1954 were includible in Lois Wright's income
for those years as income in respect of a decedent within the meaning of
Section 126 of the Internal Revenue Code of 1939 and the comparable section,
Section 691 of the Internal Revenue Code of 1954, and hence taxable income,
but as to the year 1955 we reverse the Tax Court's determination that she so
received $50,000 in that year, and, following Findlay, hold that her gross
income was increased in that year by only $19,815.05 and not by $50,000.
Counsel in this case, as counsel in Findlay, argued that the total taxes received
and to be received by the several taxing agencies because J. W. Findlay died
amount to such a staggering sum in relation to the worth of his estate as to
render the taxes paid in the United States confiscatory of property without due
process of law in violation of the Fifth Amendment to the United States
Constitution. There is no merit in this argument.
The decisions of the Tax Court are affirmed except as to its determination with
respect to the proper amount of Lois Wright's includible income for the year
1955, and as to that the case is remanded for proceedings consistent with this
opinion.