Ella E. Harrold v. Commissioner of Internal Revenue

We have before us on this appeal a somewhat bizarre cause. The Commissioner of Internal Revenue received payment of all income taxes due from petitioner and her then husband for the years 1946, 1947 and 1948. The spouses were then living together as husband and wife. But because the husband, later, after divorce, filed a claim for refund of that part of the taxes paid by him representing his wife’s (petitioner’s) share of the tax on the community income, the Commissioner has reopened the wife’s tax status and assessed a deficiency tax against her. Obviously this was done in order to protect the government against the possibility that the husband’s claim for refund was valid. The Tax Court has approved the deficiency assessment against the petitioner and she has appealed to us.

Petitioner and respondent have filed elaborate briefs on several questions of law which both claim are involved. However, as sometimes happens, the facts have thereby become obscured, and, to some extent, forgotten in the heat of legal controversy. A review of the stipulated facts is sufficient to convince us that the decision of the tax court is wrong.

While having once previously separated in 1945,…

(concurring).

At oral arguments, counsel for the Commissioner said more than once that our judgment would not be res judicata on Mr. Harrold when his claim is disallowed and he sues to recover payment. While this case comes to us through the tax court and Mr. Harrold’s case may be in a district court or the Court of Claims, yet I cannot believe things are necessarily so inflexible in government that the issues on his claim could not have been determined before or about contemporaneously with this claim against Mrs. Harrold.

It may be noted that by someone’s careful planning the issue in two separate cases of who should get a depletion allowance on oil produced as a consequence of whipstock drilling from the shore into the sea reached the Supreme Court simultaneously in Commissioner of Internal Revenue v. Southwest Exploration Company (United States v. Huntington Beach Company), 76 S.Ct. 395 , 100 L.Ed. —. There the Southwest case went up through the tax court and this court. Huntington paid the taxes and sued for a refund in the Court of Claims.

Of course, the Commissioner could not schedule when Mr. Harrold, if his refund were disallowed, would file his action within his…

232 F.2d 527 56-1 USTC P 9465 Ella E. HARROLD, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. No. 14694. United States Court of Appeals Ninth Circuit. April 2, 1956. David Livingston, Harold R. Farrow, James R. Mansfield, A. L. Bjorklund, Jr., San Francisco, Cal., for appellant. H. Brian Holland, Asst. Atty. Gen., Lee A. Jackson, A. F. Prescott, Karl Schmeidler, John Kelley, Jr., Sp. Assts. to Atty. Gen., Washington, D.C., for respondent. 1 Before POPE and CHAMBERS, Circuit Judges, and GOODMAN, District Judge. 2 GOODMAN, District Judge. 3 We have before us on this appeal a somewhat bizarre cause. The Commissioner of Internal Revenue received payment of all income taxes due from petitioner and her then husband for the years 1946, 1947 and 1948. The spouses were then living together as husband and wife. But because the husband, later, after divorce, filed a claim for refund of that part of the taxes paid by him representing his wife's (petitioner's) share of the tax on the community income, the Commissioner has reopened the wife's tax status and assessed a deficiency tax against her. Obviously this was done in order to protect the government against the possibility…