Irmgard Santos v. Commissioner of Internal Revenue

Irmgard Santos petitions us to review a decision of the Tax Court upholding an assessment by the Commissioner of a deficiency against her of $68,287.90, under Section 311 of the Internal Revenue Code of 1939, 26 U.S.C.A. § 311 , for income taxes owed by her husband, Lawrence Santos, for the years 1943-6.

Under Section 311 a transferee of property of a taxpayer may be liable for the taxes of the transferor if the Commissioner sustains his burden of showing:

The transactions between the husband and wife for the years in question were governed by the Hawaiian Community Property Law, in force from June 1, 1945, to June 30, 1949, when it was repealed. The facts in this case are for the most part stipulated. So far as pertinent, the essential facts appear to be as follows:

Early in the nineteen forties petitioner’s husband began to acquire a large shoe business in Honolulu, where he and petitioner resided. It is undisputed that during the existence of the Community Property Law petitioner’s share of the community income was $154,976.51. After federal income taxes, petitioner’s community income was $84,-686.00. The parties further agreed, and the Tax Court found, that during all times…