Anna Poggetto and A. D. Poggetto v. United States

Appellants seek to recover federal income taxes paid for the calendar years 1956 and 1957, on the ground that $23,-000.00 which had been received and reported as income by their daughter Marian Poggetto, was improperly attributed to appellant A. D. Poggetto. Under state community property law each appellant,' A. D. Poggetto and his wife, Anna, was taxed by the Commissioner of Internal Revenue on fifty per cent of the above amount. The trial court held that the Commissioner was correct. The question presented is whether Marian Poggetto should be considered a member of a so-called “family partnership” for income tax purposes.

Appellant A. D. Poggetto, a dominant figure in a corporation known as the Fruitvale Canning Company (hereinafter the Company), conceived the idea of forming a partnership for the principal purpose of selling the canned products of the Company. In 1941, appellant A. D. Poggetto and certain employees of the Company formed a partnership known as the Fruitvale Canning Company Sales Division (hereinafter the Sales Division). The Sales Division was organized to give the employees an interest in the business and an incentive to sell the products of the Company as…