United States v. Paul W. Sampsell, Trustee in Bankruptcy for the Estate of F. P. Newport Corporation, Ltd., Bankrupt

The United States of America, hereafter Government, has demanded payment of income taxes from Trustee Sampsell on income alleged to have been received by the bankrupt estate from May 26, 1952, to January 1, 1953. The Government duly filed its claim asserting a deficiency. The trustee filed objections and the referee in bankruptcy entered an order disallowing the claim. The Government petitioned the United States District Court for review. The order of the referee was confirmed. The cause was submitted on a stipulation of facts.

This is not the first time the trustee has been in disagreement with the Government over liability of the bankrupt estate for income taxes. The trustee challenged the right of the Government to collect taxes for the years 1938 and 1939. Litigation ensued and culminated in a decision of this court upholding the Government’s contention, United States v. Metcalf, 9 Cir., 131 F.2d 677 , certiorari denied 318 U.S. 769 , 63 S.Ct. 761 , 87 L.Ed. 1140 . In the Metcalf case this court said that it is the nature and character of the operation of the bankrupt’s property by the trustee which determines whether such operation falls within the meaning of § 52 of the…