Remedios A. Flores, of the Estate of Jose M. Flores and Remedios A. Flores, Individually v. Government of Guam

Jose M. Flores and Remedios A. Flores, his wife, filed suit for refunds of income taxes imposed and collected by the Government of Guam [hereafter Guam] for the years 1956 to 1961 inclusive. Jose M. Flores is now deceased and his wife is substituted as his executrix. Appellants appeal from a decision of the district court denying their claims. We reverse.

Factual Summary

In their action in the district court, appellants jointly claimed the following refunds:

The claim by the wife, Remedios A. Flores, was as follows:

The claim of Jose M. Flores was denied by the Internal Revenue Service on the ground that he was a non-resident alien of Guam for the period in issue, 1956 through 1961, and that he was not entitled to itemize his deductions to deduct his expense, to file joint returns, or to be otherwise treated as a citizen of Guam for tax purposes. The IRS based its denial on the applicability of a “mirrored” version of 26 U.S.C. § 932 (a) to the income tax laws of Guam.

The parties stipulated the following facts to be true:

“1. Plaintiff, Jose M. Flores, was born in Guam and after serving in the United States Armed Forces became a naturalized citizen of the United States…