Iver W. And Faith S. Swanson v. United States of America, Iver W. Swanson v. United States

The Government appeals from a judgment of the United States District Court for the Eastern District of California awarding tax refunds to appellees in two consolidated cases. In No. 9686 below, the District Court ordered a refund of $25,285.04, plus interest, to appellees Iver W. and Faith S. Swanson. In No. 9687, the District- Court ordered a refund in the amount of $258,824.52, plus interest, to appellee Iver W. Swanson individually. We affirm.

Iver W. Swanson has for many years been a licensed contractor, specializing in underground pipe construction. In connection therewith, he also conducted a concrete pipe manufacturing business. From 1940 to 1945 he was engaged in such business as a partner in a partnership doing business under the name Stockton Construction Company. From 1945 to 1950, Swanson engaged in the business as sole proprietor of Stockton Construction Company.

In January, 1950, Swanson caused a California corporation to be formed under the name of Stockton Construction Co., Inc. '(hereinafter Old Stockton). 'In all material respects, this corporation was wholly owned by Swanson. Old Stockton engaged in both underground pipe construction and the manufacture of the…