Commissioner v. Stinchfield's Estate

The Commissioner seeks a review of a decision of the Tax Court that the taxpayer respondent, hereinafter called the estate, had overpaid a federal estate tax and that taxpayer owed nothing by virtue of that tax.

The decedent, whose estate is respondent, desired to make a gift of certain shares of stock to her three stepchildren but on their refusal to accept she and the children sought to evade any inheritance tax by certain transactions determined by the Commissioner to make the value of the shares subject to the estate tax.

The error assigned by the estate in its petition to the Tax Court is the Commissioner’s decision that transfer of the shares of stock was made (a) in contemplation of death or (b) to take effect in possession or enjoyment at or after death, and lienee the shares are taxable as part of the decedent’s estate under Section 811 of the Internal Revenue Code, 26 U.S.C.A. Int.Rev. Code, § 811. The answer of the Commissioner placed in issue both contentions.

The Tax Cpurt decided only the first issue, holding that the transfer was not made in contemplation of death, a decision not questioned here by the Commissioner. It failed to pass upon the second issue, which…