# Appendix — United States v. Mitchell (No. 798) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0303%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1970 ## Text IN THE Supreme Cont of the United States OCTOBER TERM, 1970 No. 798 UNITED STATES OF AMERICA and COMMISSIONER OF INTERNAL REVENUE, Petitioners, —V.— ANNE GOYNE MITCHELL, FRANCES ANGELLO, ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT INDEX Page Commissioner Vv. Mitchell, et al.: Docket Entries in the Tax Court of the United States 1 Relevant Docket Entries in the United States Court of Ap- peals ectacens sensninnnrsninmeeenasingnhnremmnete sis SE REA Re aC er RO EE TEP Re a 10 a cata 11 Stipulation of Facts... Rep R Oe Catto Rodan 14 Supplemental Stipulation of Facts Selebeateat ashes: $ 27 il INDEX Page Transcript of Proceedings: Testimony of Anne Goyne Mitchell = 33 Second Supplemental Stipulation of Facts =. => 49 I ees lcaanhieeciciaete occ Richi naibeesisiaptathiionttienc 50 Findings of Fact and Presmncadle of the Tax Court — January 27, 1969) _ he ts 51 Decision of the Tax Court src March 19, eee No. 6740-66 67 Decision of the Tax Court (Filed March 19, 1969), No. 6741-66 asd leeiaiees shasta os 70 ee CC Oe, ee Gee ee 71 pee ae eee, Ce eee. 72 Opinion of the Court of Appeals... = 73 Judgment of the Court of Appeals 83 United States v. Angello: Docket Entries in the United States District Court 84 Relevant Docket Entries in the United States Court of REE IRD RES EET: Sere anon OOS Oe 87 Petition for Removal from State Court, with attachments __ 88 ak selibeesanaclioaiinaecscoheanonisooons 93 I, I ii acta enicnsinicecnencsnbninintecaencm oases 94 Motion to Dismiss, with attachments 96 Hearing on Motion of United States to Intervene and Motion of United States to Dismiss and Order —* Both Motions 101 Answer to Petition in Intervention ______ RE SR ED 101 Interregatioricn (To Phintit) .......... ...——a & a ? - _ “2 SS a Gy | ios cS t a? 21.21 1, 1.7] —aeN - : a wl stars | ! } eee M5 @! 2ovvo0 | ; 1,205.46 #2 be wy | ; @294.4 i.? $3.09 3 - 3G) «43800 | gt | TIETS Ut 2? & ) | 16.9 1 } a ) MG 2? 65 | | LG.29 ! R Ma XP +? & $Ny v_O-ry - | 531.39 « ae 157 4H) | | ! pg cF & (4 om 1194 | . 543,33 AN 28 67 ani 12.69 | $56.22 / | 4 This item cer; yis:@2 AG be A true bopy Hy yy AVeords. : ifs z —s FY y SO Henry “I.” “rasor : VOC en TTPOIS | i. t. 4 } ? > ~~ oe ! ‘ t CPP ae: eo: ; : ? i ' Remedi Q—! i ; ——ji i to y 3 ‘ : f : i: : “Wik ine = es etic l RUSTON BUILDING & LOAN ASSOCIATION RUSTON, LOUISIANA Pa nit 20 ou > —e . . ——- ,Bbe3, PRP IMENT INTERN SL REVENUE SLEVICE art, 18 STATEMENT OF FINAKCIAL CONDITION AND OTHER INFORMATION (Tob TAKPAY ER ine GC, Mitchell ——— ee ee ————. 2. CHECK AL PHO onIA TE BLOCK: j Doiwervtnuac Pam tn oRsee Geant HOME ADDRESS 95 South Vienna Street yston, Louisiana es - : [CORPORATION Pas HOME PHONE 255-0906 wANESS, SHOW ADORESS ~~ &. buS. PRONE — “mn SPORECLOSU RE, DANKPUPTCY, RECO VE? SHIP, OR ASSIGNMENT FOR CENC EIT CF sNTORS PROCEEDINGS FEN OING? Lives xo a HE INDIVIDUAL, COMPLETE THIS SECTION ANDREVERSE OF TH S FORM SNPATION aand (m) “am School Teacher t=) 2. SOCIAL STCURITY NUMBER hw) = 38-30-7122 — -—— te. AVERAGE wutKLY TARE HOME Pay tw) t™ = §=93, 50 -_r~ SEAN'S EMPLOYER (Nome ond -idviress) 12. PRONE 1S. HOR LONG 14 DATES PAID cMPLOvEo FOLO ofC'S EMPLOYER (Name en! Address) 1€, PHONE 17, HOW LONG Ye. OATES PAID eMPLOYED lincoln Parish School Board lst of each luston, Louisiana 255-1430 5 Years month THER INCOME (Sowee) 20. AMOUNTS 2). MATES RECENVEO Interest Income from Ruston Building & Loan Assn, June 30 & Ruston, Louisiana 68,84 Dee. 3let wut AL 2. wO.OF ExEUR Tae NAMG AND ADDRESS OF NEXT OF KIN (Other than spouse) we io. Mrs, Jane G, Sims 2 Westwood Hills ure eO Ruston, Louisiana IF PARTNERSHIP OR CORPORATION, COMPLETE THIS SECTION ANO REVERSE OF THISFORM TWaTEO AVEPAGE NET INCOME FOR NEXT 51K MONTHS: SETHE FOLLOWING INFORMATION ON OFFICERS OR PARTNERS NAME AND TITLE ACORESS NUMGER OF HARES OR INTEREST POR ae eww oeer-” Form 433-A8 tnev, &6n Exhibit 21 ee eee me —.. ee ee tee MEE SURES SEO! area mee y senate ce Oe SOR na SSS AS ae ter LA othe Be CALaNCE Gu ca NRAee OF ee { . a . ' wa cae j ON LOAN w! itn ‘ —— a sienna ° % > ' wp t Polic with Linceln : ae i ae ee ‘shook! a rd 3,050 a ! ae { r oni em — | j } i Sian ACCOUNTS #11) an, ANCA Gt SAFE CUPUn? GOALS syst National dank af justom, _™e Lovisi ors EcMPTION eat lec 163 Buick Special a, 92F 827 BRST MA WORR OF Vernet. Tee MIC’ OCT C RPT CATION tON *NOBULO STATEMENT OF ASSETS ———— a@edlie sci! ne tet tit Toe cere CAT OF vs et ee ©. LOGEE CR OBLIGTE R pao em fe item & wk. ry ‘> Peure [PLOEOSEO: 6 ene wanna hae dod Se SS ~ nae smeik care Semana Sap eee —, a apne ---- -- a — ee ee wNERY AND EQUI Pete nT if et a oe CLES 5 47,79.:1 uneoln “Bank, & ‘Trust June - "63. May 1y 1966 > WOLD FURNITURE SS ER Lal AD Bess SS ~aavahadinalallneiants } per ASSETS (Describe? —_—-—- + WivVE YOU DISPOSED OF PORFULL VALUE FROW . =. dge 40 fealth - Good oar, xo KD ves. ar rach SCF ARATE STATEMENT TO SHOW AMOUNTS, DATES, CIRCUMSTANCES, © MADDITION AL IN FORMATION « Give GENERAL st ATEWE at REGARDING HPOSPETT OF INCREASE Ih VALUE OF ASSETS OR IN PRE- ce nh nn gen hm me 2 eee eae ee —- - iietuas — ' ee — LccoUNTS PAYABLE ru | : é e ii ca —=_-——-——- -— i ——— —+ —_—_— —— -- -+{--—————— -_—_— 4 a aig fo ge een ee 22 te - pan Rurtute petqmes)_ a ee oe iss Income Tax Q =" . is ' > ! acs 1748. &O. 27,70 i RAL TAXES OUTSTANDING s V ASSETS G@ PROPERTY BY CALL, TRANSFER, EXCHANGE, GIFT OR IN ANY OTHER MANNER EXCEPT > BCCINNING OF TRE (AR ABLE PERIOD IN HICH THE LIABILITY WAS INCURRED TO THE PRESENT SENT INCOME + INCLUDE TAKPAYVER'S AGE AND CONDITION OF KEALTH. Wi AFFIDAVIT be ) declare unter tie penalties ci petiury that the for end ether going stctc f ry (OUR) browledge and inform stior: is true and correct te the best belief. nent of assets ena liabilities, ure SIGNATU 1965-/ FO rate SIGNATURE L FAThith ‘ ~ i | i (REVERSE) Form 433-AB (nev, @-63) ANNE G. MITCHELL 505 SOUTH VIENNA STREET RUSTON, LOUISIANA 23 STATEMENT SUPPORTING FoRM 4383-AB, ITEM 33 On December 23, 1964 transferred to my sister, Mrs. Jane G. Sims, without consideration the following: [. My undivided one-half interest in the following real property which was acquired by inheritance from my mother in November, 1964: Description a. S 4 of Lot No. 1 of Square No. 12, Town of Ruston, Louisiana, together with all improvements and appurten- ances thereon and thereunto belonging, according to the original plat and sur- vey of Town of Ruston, Louisiana on file and of record in the office of the Clerk of Court in and for Lincoln Parish, Louisiana, . Lot No. 45 of Unit No. 2 of North- wood Terrace Subdivision, as per map and plat of said subdivision on file and of record in the office of the Clerk of Court in and for Lincoln Parish, Louisiana. . All that part of E 14 of SE 4, Section 3, Township 19 North, Range 5 West, being situated in Lincoln Parish, Louisiana. . Lots No. 70 and 71 of Caddo Heights Supplement in Section 8, Township 20 North, Range 15 West, Caddo Parish, Louisiana. TOTAL VALUE OF REAL PROPERTY Value of My One-half Interest In Mother’s Succession $7,500.00 500.00 1,500.00 ___ 50.00 $9,550.00 24 II. Cash in savings account in Ruston Building & Loan Association, Ruston, La. $1,721.21. 1/26/65 The foregoing assets were transferred to my sister on the recommendation of my attorney who had just closed my mother’s succession in November, 1964, approxi- mately one month prior to receipt on December 19, 1964, of the Final Notice Before Seizure for 1954 income tax. Prior to closing my mother’s succession, I discussed with my attorney the matter of the income tax liability for 1954 through 1959. He advised that I could renounce my interest in the succession and thus pass my interest in mother’s estate directly to my two children. However, as it had been over two years since I was contacted by Internal Revenue Agent, Deuel C. Smith, in regard to signing with my former husband on his Offer in Compro- mise, and I had heard nothing since, he felt that the matter was settled and therefore put me in possession. Then, after I received the Notice on December 19, 1964, he felt that to protect my interest, the foregoing assets should be transferred which would leave me in the same financial status as if I had renounced my interest in mother’s estate. —_—_—_—-— SEPA oe ae “ “ ©. *\ “ ‘ ta H i en ee —_— Gvihers —— en - ye Teraue yea J TYPE OF TAR eS | sm re a ee ee ee ee = ee 9 ee © oye ~,. ” a Surporate Sea A'D22+0- bnrrve. Fret Cha Ce telex v 79s = a —_ oa TU ro ee ae s ieee Sen TRANSCRIPT OF PROCEEDINGS Filed; Oct. 30, 1967 (10) ANNE GOYNE MITCHELL was called as a witness on behalf of the Petitioner, and, having been first duly sworn, testified as follows: THE CLERK: For the record, may we have your name? THE WITNESS: Anne Goyne Mitchell. THE CLERK: Your address? THE WITNESS: 101 Ashway, Lafayette, Louisiana. THE CLERK: Thank you, DIRECT EXAMINATION BY MR. KIRKPATRICK: Q Mrs. Mitchell, are you the Petitioner in Anne Goyne [11] Mitchell vs. the Commissioner of Internal Revenue in Docket No. 6740-66? A Yes, I am. Q Mrs. Mitchell, did you file any tax returns for the years 1954 tiirough 1959? A No, Q Mrs. Mitchell, would you tell the Court why you did not file ta». returns? A Well I had not been responsible for filing tax re- turns at any time after my marriage. Tax returns had, as far as I knew, been filed each year. MR. McARDLE: Objection, Your Honor. The returns themselves will be the best evidence as to whether they were filed. 34 MR. KIRKPATRICK;: If Your Honor Please, the witness has been assessed penalties for failure to file returns and this testimony goes to the reasonable cause for her failure to file and negligence. THE COURT: I think I will let the statement stand. It isn’t worth much as evidence unless you want to go into it to show how she knew or thought she knew. MR. KIRKPATRICK: Yes, Your Honor. THE COURT: That’s a conclusion on the part of the witness and worth nothing as evidence really unless it is expanded I will let it stand. [12] BY MR. KIRKPATRICK: Mrs. Mitchell, when were you married? September 22nd, 1946, And you were divorced in 1962? Yes. During that period of time, did you ever file a tax return? A No. Q Did you believe that your husband filed tax re turns? A Yes. I did. Q Why did you believe that he was filing tax re turns? A He led me to believe that he was filing tax returns each year at the proper time. Q How did he lead you to believe that, Mrs. Mitchell? A He talked about getting help with his, getting his tax return filled out. He talked about the difficulty of finding additional money when it was needed to pay the taxes at the time that the taxes were due. OPO PO 35 Q Mrs. Mitchell, did you know that someone in your family was required to file Federal Tax Returns? A Yes. Q Did you know how much money your husband made? A No, I did not. Q During the entire course of your marriage, did you [13] ever know how much money your husband made? A No, I didn’t. Q Did you ever ask your husband if he filed his tax return? A Yes, of course. Q Did you ask him once or did you ask him many times? A Each year. Q Is it your testimony you asked your husband each year whether he filed his tax return or not? A Yes. Yes. Q Did you feel it necessary to ask him if he had filed his tax return? A Yes. I did. Q Why did you find it necessary? A Because he was very remiss in taking care of his financial obligations in other respects. I frequently had to make comments regarding things that needed to be taken care of in a financial way. Q Well did this cause you to think perhaps that he had not filed his tax revurn? A No. It did not. Q Well if you were concerned about his not paying other bills and being remiss in his financial obligations, why did you not think he would be remiss in this type of obligation? A I would say this; I was not so much concerned about [14] the possibility that he would not file a tax return as the possibility that he would not make the deadline at which time it should be filed. I would not have dreamed that he would not have filed the return because of his fear of the possible conse- quences which I assume would be immediate. 36 Q Mrs. Mitchell, did it strike you as unusual that your husband did not ask you to sign a tax return? A No, it didn’t. I assumed that he signed my name to the return which he had done prior to this time. MR. McARDLE: Objection, If he had signed it, the return would be the best. evi- dence of his signing. THE COURT: She said, she assumed he had signed her name as he had done and that is a conclusion on the part of this witness, That will be stricken, unless you care to go into it. BY MR, KIRKPATRICK: Q Mrs. Mitchell, your husband ever told you that he had signed your name? A No. Just that he had sent the return. MR. KIRKPATRICK:;: If Your Honor, Please, it may not be the most impor- tant point in the world but I suggest this witness’ as- sumption is pertinent to this inquiry [15] because her assumption does involve an attempt at negligence and reasonable cause and— THE COURT: I think it is pertinent to the inquiry, too, Mr, Kirk- patrick, but it is not worth yery much as evidence un- less you show what it is based upon. The evidences that led her to assume— BY MR. KIRKPATRICK: Q Mrs. Mitchell, you did assume a tax return had been filed, did you not? A Yes. I did. Q Did your husband tell you that he was filing a tax return? 37 A Yes, he did. Every year. Q Did your husband tell you that he employed any- one to prepare that tax revasn? A Yes, he did. Q Who did he say he employed? A He said that he employed Mr. Albritton who was an accountant in Farmerville, which was his hometown. Q Would this be true during the entire period, Mrs. Mitchell or would this be true as to a particular year? A It would be true during, certainly during these years that are under discussion. Q Did you know, Mrs. Mitchell, that your husband —did you know whether or not your husband—strike that, please. (16] Did you know whether or not you were required to sign your husband’s Federal Income Return? A_ Well, yes. I knew a joint return should be filed or that a return should be filed. Q And you knew that—did you know you had not signed that return? A Yes. Q Were you conscious of this when you were asking your husband if he had, if he had filed his tax return? A Was I conscious that I had not signed the return? Q Yes, Ma’am. A No. Actually I was not for this reason; he had filed returns in the past. MR. McARDLE: Objection, Your Honor, whether he had filed or not. The returns would be the best evidence of that. MR. KIRKPATRICK: If Your Honor, Please, this case involves whether a return was, in fact, filed. This witness has been assessed penalties for her fail- ure to file a return and for her intentional disregard of the Rules. This witness’ testimony is that she thought her hus- band had filed returns. He had given her reasons to believe that he had filed returns. —a 38 THE COURT: We are on the signatures on the return [17] now, Mr. Kirkpatrick and the particular statement under at- tack of the objection is that in the past he had signed her name to returns. Now obviously she’s talking about an instrument which possibly might be available for introduction as an ex- hibit and what has been invoked by the objection is the best. evidence rule. Unless you can show unavailability or some reasonable attempt to obtain such a return or copy I think I will have to sustain that objection. MR. KIRKPATRICK: Well I agree Your Honor. As a matter of fact, the Government does not have the returns. THE COURT: If you can show that then that is a showing of un- availability and I will allow the witness to testify. MR. KIRKPATRICK: Well I really can’t, the witness is not competent to testify that her husband signed her name to the return if she had not signed the return herself. I agree she cannot establish the fact her husband signed her name to the return. THE COURT: I believe you misunderstood what I said, Mr. Kirk- patrick. I said I would allow the witness to testify as to prior returns and maybe her not having actually seen them [18] would become unimportant if you are able to show the unavailability of such returns. MR. KIRKPATRICK: Will Counsel agree there are no such returns? 39 MR. McARDLE: No, because I haven’t check the Federal records and beyond that even if the Federal Government no longer has the returns the best. secondary evidence would be copies of the returns held by Anne Goyne Mitchell ana no one has attempted to find out if she has copies of the returns. THE COURT: Absent such a showing, I will have to sustain the objection to the testimony. MR. KIRKPATRICK: All right, Your Honor. BY MR. KIRKPATRICK: Q Mrs. Mitchell, why did you believe that your hus- band had signed your name to the returns? A Well I knew that the return had to be signed. The returns had been sent each year and I had not signed them. MR. McARDLE: Objection, Your Honor. THE WITNESS: Therefore— MR. McARDLE: Objection. The best evidence again. There is no evidence that returns were signed or were mailed. THE COURT: That will be sustained. BY MR. KIRKPATRICK: Q Mrs. Mitchell, you have testified that you did not [19] sign any returns and that you did not see the re- turns and so obviously you do not know, of your own personal knowledge, that the returns were filed and that your name was signed to them? 40 A That's right. Q I am asking you why you believed, as you testi- fied, that your name had been signed to the return? A Well T have reference here to the returns prior to 1954. Q Do you know, Mrs. Mitchell, that returns were filed prior to 1954? A’ To the best of my knowledge, although I did not see them. MR. McARDLE: Objection, Your Honor. MR. KIRKPATRICK; If Your Honor, Please, this witness is competent to testify if she does or does not have, does not know that returns were filed. MR. McARDLE: The returns themselves are the best evidence, Your Honor. I object. MR. KIRKPATRICK: Returns are the best evidence themselves, Your Honor, but this witness’ knowledge cannot be shut out of. the record simply because the Government cannot produce returns. THE COURT: There is no showing of an attempt to get them, Mr. Kirkpatrick. That’s the whole point. [20] MR. KIRKPATRICK: If Your Honor, Please, the return itself is not the point that the Petitioner is trying to make, The Petitioner is simply trying to develop the reasons why she believed that a return had been filed. I do not se that the witness can testify that a return was led. . If 1 will be permitted to continue, I will try to estab- sh— 41 THE COURT: Very well. Continue. BY MR. KIRKPATRICK: Q Mrs, Mitchell, you have testified that you have never signed a return— A (Witness nodded affirmatively. ) Q —from the period of 1946 until the termination of your marriage. Have you ever seen a tax return prepared for your- self and your husband or for either of you? No. Q So you cannot testify, can you, that you saw a return prepared or that you know that one was filed? A No. I cannot. Q Of your own personal knowledge, you could not testify today, could you, that a return had ever been filed during the time that you were married? [21] A Not of my own knowledge. No. Q You do testify that you thought a return had been filed? A Yes. I do. Q Is it your testimony that you thought a return had been filed each year? A Yes, it is. Q And you assumed that your name had been signed to the return by your husband? A That’s correct. Q My question is: what led you to make that as- sumption? A Well, prior to 1954 these returns had been filed. MR. McARDLE: Objection. THE WITNESS: I don’t know how to answer the questions without— BY MR. KIRKPATRICK: Q Do you believe returns were filed prior to 19547 A Yes. I believe returns were filed all the way up to the end of my marriage until I learned otherwise. 42 Q Why do you think returns were filed prior to 1954? A Because each year at the time that returns should be filed my former husband informed me that he was filing the return at the proper time. [22] Q Now, Mrs. Mitchell, although you believed your husband was filing returns because he told you he was— A Yes. Q —why did you think your name had been affixed to the return? A Well someone had to put my name on the return. I did not do it. So, I assumed that he did. Q Is it your testimony then that simply because you assumed a return had been filed and you believed that your name, your signature was necessary to the return that you assumed from that that your name had been affixed to the return? A Yes. Q Mrs. Mitchell, did you ever see a pay check of your husbands? A No. I did not. Q Did you handle the money in your family? A With regard to incidental household purchases, yes. Q You had a joint bank account? A Yes. Q And you drew checks upon that account? A Yes. Q Did you see the balances in that account? A Very rarely. Mrs. Mitchell, you transferred certain property [23] to your sister. You transferred some real estate aod you transferred a building and loan account which you had inherited from your mother. Did you have an agreement with your sister to re- transfer that property to you? A No. At the time I made the transfer under the advice of my attorney. Q Did your sister transfer any of that property back to you prior to this deficiency being proposed? 43 A I have used some of the money from the building and loan account. Q How much have you used? A Twelve hundred dollars. Q In what year did you use that money? A In 1965-66. MR. KIRKPATRICK: Thank you, Mrs. Mitchell. That’s all. CROSS EXAMINATION BY MR. McARDLE: Q Mrs. Mitchell, why did you separate from your husband? A Well it’s culmination of a long series of events. I would say the primary cause, the crux of the whole matter was his continuing financial irresponsibility over a very long period of time. [24] Q Did you attend college? Yes, I did. Are you a Teacher? Am I a Teacher? Yes. Yes. I am. Where do you teach now? I teach at the University of Southwestern Louisi- ana, at Lafayette. Q And during some of the years here involved, you taught at St. Paul’s; is that right? A Yes. Q Would you consider yourself a reasonably intelli- gent woman? A I would think so. Q Now, you stated that you were aware Income Tax Returns were required of individuals? A Yes. Q And you have testified that you never signed a oe any return any time during your marriage? es. POPO Pop 44 Q And that you never saw a return and what not, Did your husband gamble? A_ I have reason to believe that he did. Yes, Now he wasn't financially responsible in paying his [25] debts? A That's right. Q Could he afford gambling losses? A No. We could not, Q And did he borrow money to finance his gambling? A_ I don’t know, He did borrow money but whether it was to finance gambling, I don’t know. Q Did he lie? A Yes. Very often, Q You consider gambling and borrowing money and lying not supporting the family an irresponsible act? A Yes, I did. Q You would consider your husband to be irrespon- sible? A Yes, I would. Q Did your husband sell the residence at 1255 Au- burn Street in Monroe, Louisiana in 1956? Yes, he did. Was that property in joint names? In joint names? Was it your property and his property? Yes. When that property was sold, did you sign the contract? A (Pause). I honestly can’t remember. 26] Q Well you do realize if you have a legal docu- ment such as a transfer of a home and what not where your signature is required, that you are supposed to be the one to sign it. Is that right? A Yes. Q And you don’t consider yourself irresponsible? A No. I do not. May I ask a question? Is it not possible in Louisiana for a husband to trans- fer property without the wife’s signature? OPrOore> — 45 Q Well I would have to look up all of the law before I could answer that. I am sorry. Did you ever ask your husband to see a retained copy of the Income Tax Return? A Yes, | have. Q Did he show it to you? A No. He did not. Q Then you never saw either a retained copy or an Income ‘Tax Return? A No. Q You stated that you and your husband had a joint bank account, Is that correct? A Yes. Q And that you could draw checks from that bank account? {27} A I could with some degree of risk. But you did? What? You did draw checks from that checking account? On occasions, Did you ever see the stubs? You mean, the bank statement? The statement or the checks? Or checkbook stubs? Either one? Very rarely. You did see them on occasions? On occasions. Not the stubs, the bank statement on occasions. Q Did you ever go through any of these retained copies of checks for the cancelled checks or the stubs of the bank statement to determine if your incoming liabilities had been paid? A No. I did not. Q Did you ever contact the Internal Revenue to see if returns had been filed? A Well it never occurred to me to do that. Q Well then, you never verified actually that your returns—never really attempted to verify if your returns had been filed? >o FPOPO PO PO PO 46 [28] A No, I did not. But, may I say this; I assumed that— Q Yes. I understand that. Is it correct in July of 1960 that you were informed that no returns had ever been filed for the years '54 through 1960? A That is correct. Q Now this was July of 1960 and you were still living with your husband? A Yes, I was, Q At that time, did you file a return for the years involved? A At that time did I— Q After you found out Income Returns had not been filed for 1954 through 1959, did you then file Income Tax Returns for any of those years? A_ No, I didn’t. Q Not even for 1959? A I filed a return for 1960. Q Yes. But, in July of 1960 you found out 1959 Tax Returns had not bene filed; is that correct? A Yes, But, in July of 1960 you found out 1959 Tax Returns had not been filed; is that correct? A Yes. Q And after you found out you did not file a 1959 Income Tax Return; is that correct? [29] A_ TI had no idea that I could at that point. Q Did you file one? A I did not know. It did not occur to me to do so. Q Now you stated that you inherited this real prop- erty from your mother that you transferred on Decem- ber 23rd to your sister, Jane Isabell Goyne Sims? Yes. ag did that under advice of counsel? es. a that advice of counsel related to Income Tax? es. POPrO>Y 47 Q In other words, he told you to get the property out of your hands so it could not be collected for Income Tax? A At that time the Internal Revenue people from Shreveport were threatening to seize the property and to garnishee my salary, My attorney L, D, Knapper in Ruston advised me to transfer the property to my sister and so I did. Q And you did this? A Yes. Q As you stated in your financial statement, without consideration? A Yes. Q Now Exhibit “L” is the financial statement that you prepared on February Ist, 1965, I believe. Would you look at this? [30] A Right here? Q Yes. Now this was signed on February Ist, 1965, is that right, I believe? Does that represent substantially the assets that you held on December 23rd, 1964; in other words, excluding the property you transferred to your sister on December 28rd, 1964? You had no other property other than what is in that statement? A That’s right. MR. McARDLE: That’s all, Your Honor. THE COURT: Mrs. Mitchell, what was your college or university? THE WITNESS: Louisiana Polytech Institute in Ruston. THE COURT: Your degree? THE WITNESS: BS in Home Economics. 48 THE COURT: Home Economics. What is it you teach now? THE WITNESS: I am now teaching Speech. THE COURT: Speech? THE WITNESS: Yes. . * * a [3] RECROSS EXAMINATION BY MR. McARDLE: Q Mrs. Mitchell, you could write letters to the In- ternal Revenue, could you not? A It never occurred to me there was a need to write letters to the Internal Revenue because I did not know that returns had not been filed until I was so informed in July of 1960. Q You did not know that they had been filed either? A No. But I had no reason to believe that they had not been. MR. McARDLE: That’s all. MR. KIRKPATRICK: I have no further questions, Your Honor. _ 49 TAX COURT OF THE UNITED STATES Docket No. 6740-66 Docket No. 6741-66 Filed: January 16, 1968 ANNE GOYNE MITCHELL, JANE ISABELL GOYNE SIMS, PETITIONERS versus COMMISSIONER OF INTERNAL REVENUE, RESPONDENT SECOND SUPPLEMENTAL STIPULATION OF FACT IT IS HEREBY STIPULATED that, for the purpose of this case, the following statement may be accepted as fact and the exhibit referred to herein and attached hereto is incorporated in this stipulation and made a part hereof: 38. On September 18, 1961 Anne Goyne Mitchell re- nounced the Community of Acquets and Gains formerly existing between herself and Emmett Leon Mitchell, Jr. 39. Attached hereto and marked Exhibit R is the Act of Renunciation of Community filed for Record in Con- veyance Book 84 at Page 371 on September 19, 1961, Lincoln Parish, Louisiana. (Signed) Paut K. KIRKPATRICK, JR. Paul K. Kirkpatrick, Jr. Counsel for Petitioners 1000 Ouachita Bank Monroe, Louisiana 71201 (Signed) LESTER R. URETz Lester R. Uretz Chief Counsel Internal Revenue Service EXHIBIT R STATE OF LOUISIANA PARISH OF LINCOLN RENUNCIATION OF COMMUNITY BE IT KNOWN AND REMEMBERED, That on this 18th day of September, 1961, BEFORE ME, the ger att Notary Public in and for Lincoln Parish, State of Louisiana, and in the pres- ence of the undersigned legal and competent witnesses: PERSONALLY CAMS AND APPEARED, ANNE GOYNE MITCHELL, a resident of Lincoln Parish, Lou- isiana, who has been married but once and then to Emmett Leon Mitchell, Jr., from whom she has been judicially separated, who declared that: She was judicially separated from Emmett Leon Mitchell, Jr., on September 14, 1961, by Judgment ren- dered in the Third Judicial District Court of Louisiana in and for Lincoln Parish, in proceedings numbered 18094, Civil Docket, styled “Anne Goyne Mitchell vs. Emmett Leon Mitchell, Jr.” Appearer desires and is entitled to exonerate herself from the debts contracted during the marriage of Ap- pearer and Emmett Leon Mitchell, Jr. In accordance with the laws of the State of Louisiana, and particularly Articles 2410 and 2415 of the Revised Civil Code of Louisiana, Appearer has and does hereby and herewith renounce the legal partnership of the Com- munity of Acquets and Gains that formerly existed between her and Emmett Leon Mitchell, Jr. Appearer declared that she has not done or performed — any acts whatsoever indicating an acceptance of said Community of Acquets and Gains. IN WITNESS WHEREOF, This Act of Renunciation of Community has been executed by ANNE GOYNE MITCHELL in the presence of the undersigned legal 51 and competent witnesses and Notary Public in Ruston, Lincoln Parish, Louisiana, on the day, month and year first hereinabove written, after due reading of the whole. ATTEST: /s/ GLENDA LAUTER /8/ ANNE GOYNE MITCHELL Anne Goyne Mitchell /s/ L. D. NAPPER Notary Public in and for Lincoln Parish, Louisiana IN THE TAX COURT OF THE UNITED STATES Docket Nos. 6740-66, 6741-66 Filed January 27, 1969 ANNE GOYNE MITCHELL, PETITIONER Vv. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT JANE ISABELL GOYNE SIMS, PETITIONER Vv. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT 1. Held, that under the community property laws of Louisiana a wife has a present, vested interest in the income of the community and is therefore under a duty to make either a single or a joint return, and is liable for the tax on one-half of community income; and this is so, even though the wife subsequently renounces the community of acquets and gains and _ takes nothing therefrom. Held, further, that wife’s failure to file a return was without reasonable cause and her failure to pay the tax was negligent. Determined penalty for un- derpayment of estimated tax is mandatory since statu- —— ———— 52 tory exceptions are not applicable, and such determina- tion is upheld. 2. Parties agree that a prior assessment against wife and her husband was invalid and void as against wife. Held, the thrust of sec. 6404, I.R.C, 1954, is permissive, not mandatory, and respondent was not required to abate void assessment before making determinations herein. 3. Held, liability for tax on one-half of Louisiana community income is upon wife, and consequently her gratuitous transfer of her separate property to her sis- ter, which transfer left her insolvent, makes the sister liable as a transferee. Paul K, Kirkpatrick, Jr., for the petitioners. Bruce A. McArdle, for the respondent. FORRESTER, Judge: In these consolidated cases re- spondent has determined the following deficiencies in identical amounts against Anne Goyne Mitchell, peti- tioner in docket No. 6740-66, and against Jane Isabell Goyne Sims, petitioner in docket No. 6741-66, as trans- feree of the assets of Anne Goyne Mitchell: Year Income tax Sec. 6651(a) Sec. 6653(a) Sec. 6654 1955 $ 323.00 $ 80.75 $ 16.15 0 1956 1,267.73 316.93 63.39 $ 35.49 1957 453.00 113.25 22.65 12.68 1958" 1,750.71 425.02 87.54 47.00 1959 871.34 173,24 43.57 17.27 4,665.78 1,109.19 233.30 112.44 * For the years 1958 and 1959 credit has been allowed for $50.65 and $178.37, respectively. These amounts represent withholding from wages. FINDINGS OF FACT General Some of the facts have been stipulated and are so found. The stipulation and exhibits attached thereto are incorporated herein by this reference. Petitioner Anne Goyne Mitchell (hereinafter some- times referred to as Anne) and petitioner Jane Isabell Goyne Sims (hereinafter sometimes referred to as Jane) 53 each resided at Ruston, La., at the time of the filing of their respective petitions herein. Anne and Jane are sisters. The issues for determination in docket No. 6740-66 are: (1) Whether Anne, on the basis of her interest in community property under Louisiana law, is liable for income taxes on a one-half portion of the community income for the taxable years 1955 through 1959, inclu- sive, and additions to the tax thereto under sections 6651(a),’ 6653(a), and 6654; (2) whether joint and several assessments that were void and invalid against Anne for Federal income taxes and additions thereto for the years 1954 through 1959, and not abated by the respondent, prevented determination of the deficiency herein; and (3) whether Jane (docket No. 6741-66) is liable as Anne’s transferee for the deficiencies determined against her. For convenience and clarity, we shall deal with each of the above issues separately. Issue 1. Liability for One-half of the Community Income FINDINGS OF FACT On or about September 22, 1946, Anne married Em- mett L. Mitchell, Jr. (hereinafter sometimes referred to as Emmett). Anne and Emmett were divorced on October 11, 1962. During the existence of the marriage between Anne and Emmett, all of the income realized by either party was community income. Throughout the marriage of Anne and Emmett, finances were a constant source of trouble and controversy. At no time during the course of their marriage did Anne see her husband’s paycheck or know how much money he made. Although Anne and Emmett had a joint bank account, and although Anne, with some degree of risk, drew checks on this account, She was rarely aware of the balances therein. Sometime in or after 1952, while Anne and Emmett were residing at Monroe, La., Emmett rented a post 1 All references herein are to the Internal Revenue Code of 1954, unless otherwise stated. oe 7 office box and retained the only key. Subsequent to the rental of the post office box, no mail was delivered to the Mitchell’s home. When the Mitchells moved to Rus- ton, La., in 1956, Emmett again rented a post office box, and Anne was only aware of those bills and bank statements that Emmett chose to bring home. Emmett was financially irresponsible and Anne frequently at- tempted to bring to his attention those obligations she was aware of and that “needed to be taken care of in a financial way.” Anne was aware of her husband’s fiscal irresponsi- bility, and repeatedly questioned him each year about the preparation of income tax returns. She believed that Emmett would file returns because of the consequences if he did not, which she assumed “would be immediate,” but she was concerned about the returns being filed on time. Anne was led to believe that income tax returns were filed each year, because Emmett told her about getting help from Mr. Albritton, who was an accountant in Farmerville, Emmett’s hometown; and securing the additional money allegedly needed to pay the taxes. Anne assumed not only that returns had been filed but that her signature had been affixed thereto by her husband. No income tax returns, however, were filed by either Anne or Emmett for the taxable years 1954 through 1959. During 1955 and 1956 Anne was employed as a teacher by St. Paul’s Methodist Church, receiving as salary (her community one-half) $1,350 and $750 respectively. Her actual receipts in such years were $2,700 and $1,500. As a result of Emmett’s continuing financial irrespon- sibility, Anne and Emmett began living separate and apart in July 1960. On or about August 4, 1961 Anne filed suit for separation from bed and board against Emmett, praying that, under Louisiana law, she be al- lowed to accept the community of acquets and gains with benefit of inventory. She was granted a separation from bed and board a mensa et thoro, against Emmett by default, on or about September 14, 1961. On Septem- ber 18, 1961, she renounced the community of acquets and gains formerly existing between herself and Em- 55 mett, and on or about October 11, 1962, she was granted a judgment of divorce a vinculo matrimonii. Upon the dissolution of the community of acquets and gains between Anne and Emmett, she received neither a distribution of community property nor a property settlement. Respondent, in his notice of deficiency, de- termined deficiencies against Anne for one-half of the community income for the tax years 1955 through 1959, and additions thereto under sections 6651(a ), 6653(a), and 6654. OPINION in the case before us we are asked to decide whether in Louisiana, a community property State, one spouse is liable for the tax on one-half of all the income of the community irrespective of whose efforts produced the income for the community. In other words, in the absence of joint returns must one Louisiana spouse re- port one-half of the community income even though such income was earned by the efforts of the other spouse. We hold that each spouse in Louisiana is responsible for tax on one-half of the community income regardless of whose efforts produced it. In 1930, the U.S. Supreme Court decided that the community property laws in the States of Washington, Arizona, Texas, and Louisiana “entitled [a husband and wife] to file separate returns each treating one-half of the community income as his or her respective income.” 2 Poe v. Seaborn, 282 U.S. 101 (1930) ; Goodell y. Koch, 282 U.S. 118 (1930); Hopkins v. Bacon, 282 U.S. 122 (1930); Bender v. Pfaff, 282 U.S. 127 (1930). In United States v. Malcolm, 282 U.S. 792 ( 1931), the Court of Appeals for the Ninth Circuit had requested instructions from the Supreme Court on the following questions of law: *For almost 18 years income earned by a spouse who was domiciled in a community property State enjoyed the tax bene- fits of income splitting. In 1948 Congress, realizing the patent inequities between the marital unit in a community property State and a common-law State, amended the 1939 Internal Revenue Code by adding what is presently sec. 6013. 56 1. Under the applicable provisions of the Peve- nue Act of 1928 must the entire community income of a husband and wife domiciled in California be returned and the income tax thereon be paid by the husband? 2. Has the wife, under §161(a) of the Civil Code of California such an interest in the commu- nity income that she should Separately report and pay tax on one-half of such income? In a per curiam opinion the Supreme Court answered the first question “no” and answered the second question “yes,” citing Poe v. Seaborn, supra; Goodell v. Koch, supra; and Hopkins v. Bacon, supra. Although Poe v. Seaborn and the related community property cases decided in 1930 stated that a husband and wife were entitled to file joint returns, it wasn’t until our decision in Paul Cavanagh, 42 B.T.A. 1037 (1940), affd. 125 F. 2d 366 (C.A. 9, 1942), that it was decided she had a duty to return one-half of the com- munity income. In Cavanaugh, we interpreted both the decision of United States v. Malcolm, supra, and section 22(a) of the 1934 Revenue Act (now sec. 61) to hold that a wife in California could not, at her option, ro. turn one-half of the income of the community, stating at pages 1043-1044: Gross income, as defined in section 22(a) of the Revenue Act of 1934, 48 Stat. 680, ch. 277, includes “income derived from * * * dealings in property, whether real or personal, growing out of the owner- ship or * * * interest in such property, * * * or gains or profits and income derived from any source whatever * * *.” Such income must be reported by the individual to whom the statute attributes it. Clearly, therefore, the petitioner’s wife is taxable on one-half of the community income. She is the owner thereof, although not entitled to present pos- session. This appears to be the inescapable conclu- sion to be drawn from the Supreme Court’s opinion in the Malcolm case, supra, 57 Consequently, there is no longer the situation whereunder the wife may at her option return one- half of the income. Since she now must do so, it follows that the petitioner is taxable only on the other half of the entire community property. There- fore, as to the second issue in this proceeding the Board holds in favor of the petitioner. Again in Marjorie Hunt, 22 T.C. 228 (1954), we held, under the community property laws of California, that a spouse was liable for taxes on her one-half of the community income. In the instant case we are concerned with the com- munity property laws of Louisiana. Petitioners argue . that: (1) Under Louisiana community property laws the wife dces not have a sufficient interest in the com- munity property to make her liable for tax on one-half of its income; (2) Federal income taxes are community debts for which the husband is liable and a wife who renounces the community of acquets and gains is not liable for income taxes on community property; and (3) it would be unconstitutional to collect the community’s taxes from a spouse who neither received community income nor voluntarily assumed the indebtedness. We recognize that under the Louisiana community property system decisions may be found supporting the proposition that a wife has only an expectancy in the community property. See “Nature of the Wife’s Interest During the Existence of the Community,” 25 La. L. Rev. 159, 179-180 (1964); however, since the decision of Phillips v. Phillips, 160 La. 813, 107 So. 584 (1926), the weight of authority in Louisiana has favored an ownership concept. Bender y. Pfaff, supra. We deem it proper to follow this authority. See Commissioner v. Estate of Bosch, 387 U.S. 456 (1967). SIn this case the Supreme Court of Louiisana said, 107 So. at 588: “The wife’s half interest in the community property is not a mere expectancy during the marriage: * * * The title for half of the community propery is vested in the wife the moment it is acquired by the community * * *, even though it be acquired in the name of only one of them.” 58 We think that the laws of Louisiana are overwhelm- ing in their characterization of the wife’s interest as more than a mere expectancy. The Louisiana Civil Code provides, inter alia, that “Every marriage * * * super- induces of right partnership or community of acquets or gains, if there be no stipulation to the contrary” ;* that a wife may bring an action against the heirs of her husband for a fraudulent disposition of the common property;* that she may petition for a separation of property when, due to her husband’s mismanagement, her dowry is in danger or when, because of the dis- orderly conduct of her husband's affairs, she believes that his estate may not be sufficient to meet her rights and claims." We find that petitioners’ position on this point is un- tenable and accordingly we hold that in Louisiana a wife has such rights, claims, and powers in the prop- erty of the marital community as are equivalent to own- ership, and that she is responsible for the tax on one half of the community income. Petitioners contend that Anne's renunciation of the community of acquets and gains, on September 18, 1961, exonerated her from liability for Federal income taxes. In support of such contention they refer us to articles 2410 and 24117 of the Louisiana Civil Code; Stu ffler vy. *La. Civ. Code Am. art. 2399 (West 1951). Messersmith, 229 La. 495, 86 So. 2d 169 (1956). * La, Civ, Code Ann. art. 2404 (West 1951). pen, 231 La. 206, 91 So. 2d 12 (1956). Messersmith vy. Thigpen v. Thig- * La. Civ. Code Ann. art. 2425 (West 1951). Brown & Learned Vv. Smyth, 40 La. Ann. 325, 4 So, 300 (1888). * Art. 2410. Exoneration of wife or community. Art. 2410. Both the wife and her heirs or assigns have the Privilege of being able to exonerate themselves from the debts contracted during the marriage, by renouncing the partnership or community of gains. Art. 2411. Rights of renouncing wife. Art. 2411. The wife, who renounces, loses every sort of right to the effects of the partnership or community of gains. But she takes back all her effects, whether dotal or extradotal. heirs by renunciation of Puckett, 30 La. Ann. 811 (1878); and Brassac vy. Du- eros, 4 Rob. 335 (1843), These cases and statutes stand for the proposition that a wife and her heirs or assigns may “exonerate themselves from the debts contracted during the mar- riage by renouncing the partnership or community of gains.” (Emphasis supplied.) The complete answer is that the income tax is not a debt created by contract, Bender vy. Pfaff, 38 F. 2a 649 (C.A, 5, 1930), and further, that Anne’s renuncia- tion came long after her liabilities for the annual in- come taxes here in issue had attached. The wife in Louisiana does not have an option to assume the tax liability resulting from the income of the community. Smith v. Donnelly, 65 F. Supp. 415, 417 (E.D. La. 1946); Saenger y, Commissioner, 69 F. 2d 683 ( C.A, 5, 1934), affirming 28 B.T.A. 377 (1933); Commissioner v. Hyman, 135 F. 2d 49 (CA, 5, 1943), affirming 46 B.T.A. 992 (1942), Petitioners suggest that it would be unconstitutional to collect the community’s taxes from a spouse who nei- ther received community property, nor voluntarily as- sumed the indebtedness. We are not unmindful that the Federal tax obliga- tions of a wife in a community property State may be greater than those of her sister in a common-law State. But, this is not always the case for we hold only that the wife in a community property State must account for one-half of the community income, regardless of whose efforts produced such income, Over a third of a century has elapsed since the Sv- preme Court decided Poe v. Seaborn, supra, wherein the Court, in passing upon the constitutional aspects of splitting community income, stated at pages 117-118: Finally the argument is pressed upon us that the Commissioner’s ruling will work uniformity of in- cidence and operation of the tax in the various states, while the view urged by the taxpayer will make the tax fal] unevenly upon married people. This argument cuts both ways. When it is remem- bered that a wife’s earnings are a part of the com- munity property equally with her husband's, it may well seem to those who live in states where a wife’s earnings are her own, that it would not tend to promote uniformity to tax the husband on her earn- ings as part of his income. The answer to such _ argument, however, is, that the constitutional re- quirement of uniformity is not intrinsic, but geo- graphic. * * * [citations] And differences of state law, which may bring a person within or without the category designated by Congress as taxable, may not be read into the Revenue Act to spell out a lack of uniformity. * * * We find no reason why the constitutional precepts of Poe v. Seaborn, that were applicable in permitting com- munity income to be split, should not be applicable in requiring the spouse to report and pay her tax on one- half of the community income. In addition to the deficiency for one-half of the tax on the community income, respondent determined penal- ties against Anne under sections 6651(a) and 6653(a) for failure to file a tax return and for failure to pay the tax. Section 6651 (a) provides for a 5-percent pen- alty per month of the tax due, but not in excess of 25 percent for failure to file a tax return “unless it is shown that such failure is due to reasonable cause and not due to willful neglect.” We do not find willful neg- lect in the instant case; however, it is well settled that a penalty under section 6651(a) is avoided only when there is, in addition to the absence of willful neglect, a reasonable cause. Charles E. Pearsall & Son, 29 B.T.A. 747, 749 (1934). Petitioners argue that Anne had reasonable cause and that she was “not negligent unless she was under some affirmative duty to doubt her husband and independently verify his statements.” We are Sympathetic to Anne’s plight; however, we believe that she did not have rea- sonable cause. Anne neither saw the returns nor signed her name to them. It was certainly not reasonable sim- ply to assume that her husband had signed her name to 61 the returns, especially we! she did not even attempt to verify the existence of 52/4 returns. As we said in Leo Sanders, 21 T.C. 2, 1020 (1954), affd. 225 F. 2d 629 (C.A. 10, 19g5). certiorari denied 350 U.S. 967 (1956) : A wife required to file a return because of in- come of her husband {!” # community property State or who joins in a jeiMt return can not shed the responsibility for delinquency by saying that she relied entirely upon her husband, not a specially qualified tax authoritY) Otherwise Congress would be frustrated in the PUrpose behind section * * * [6651 (a) }. We find that Anne is a/8° liable for the penalties im- posed under section 6653(2)- This section provides for a 5-percent penalty on a deficiency when said deficiency, resulting from an underp2Yment, is due either to “neg- ligence or intentional disre&4’d of rules and regulations (but without intent to deffaud).” T"2 penalty imposed under this section is upon the total underpayment even though only part of the underpayment is due to negli- gence,* and the burden of Proving that no part of the underpayment was due to Negligence is upon petitioner. Terry C. Rosano, 46 T.C. 681, 688 (1966). Anne was under a duty to make either individual or joint income tax returns, 8¢¢s. 6012 and 6013, and to pay a tax on her community one-half of the taxable income shown on these réturns, secs. 1 and 2. Anne’s failure to pay income taxes resulted from her failure to file returns and we have found that Anne demon- strated a lack of due care in assuming that her husband prepared and signed her name to these putative returns. * SEC. 6658. FAILURE To PAY TAX. (a) NEGLIGENCE OR INTENTIONAL DISREGARD OF RULES AND REGULATIONS WITH Respect 7° INCOME oR GIFT Taxes.—If any part of any underpayment * * * is due to negligence or intentional disregard of rules and regulations (but without intent to defraud), there shall be added to the tax 49 amount equal to 5 percent of the underpayment. 62 Anne’s conduct in failing to file income tax returns was also responsible for her failure to pay income taxes for the years in question. Therefore, we hold that Anne was negligent, and is liable for the 5-percent penalty on her share of the community income. Respondent in his notice of deficiency determined that Anne was liable for additions to the tax under section 6654, which provides for an addition to the tax in the case of any underpayment of estimated tax by an indi- vidual. This section is mandatory unless certain excep- tions (none of which are applicable in the instant case) relating to prior year’s taxes, or payments, are complied with. It does not provide relief upon a showing of rea- sonable cause, lack of willful neglect, or extenuating cir- cumstances. Estate of Barney Ruben, 33 T.C. 1071 (1960). Anne does not come within any of the exceptions to section 6654 and is therefore responsible for additions to the tax under that section. Issue 2. Existence of a Deficiency FINDINGS OF Fact Emmett and Anne did not file Federal income tax returns, either jointly or Separately, for any of the tax- able years 1954 through 1959. Form 870, “Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment,” covering these 6 taxable years was executed by Emmett on or about January 11, 1961. The execution of this form by Emmett permitted the Commissioner to make an assess- ment without complying with the time and notice (90 day) requirements of section 6213. The Federal income tax liabilities indicated on said Form 870 for all of the said taxable years were determined pursuant to the rates applicable to joint return filings. Predicated on the Form 870 executed by Emmett, Federal income taxes and penalties were jointly assessed on March 10, 1961, against both Anne and Emmett for the taxable years 1954 through 1959, inclusive. 68 The March 10, 1961, assessments were made without notice to, or the knowledge of Anne. Anne neither granted Emmett actual or implicd consent nor authority or power to legally bind her to the Form 870. Anne neither acquiesced nor consented to being a participant or partner in the Form 870; nor did she consent or ac- quiesce to being obligate or bound by such Form 870 or any subsequent assessments thereunder. Respondent concedes that the above joint and several assessments of Federal income taxes and additions to the tax, relative to the years 1954 through 1959 were invalid and void as against Anne. Form 870, “Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Over- assessment,”” covering the taxable year 1954 was exe- cuted by Anne on August 4, 1965. Predicated on such waiver, the Federal income tax, penalties, and interest were individually assessed against her for the taxable year 1954 on August 16, 1965, in the amount of $550.87. On December 30, 1966, Anne filed a claim for refund for the above amount and on July 25, 1967, brought a refund action in the U.S. District Court for the Western District of Louisiana based upon her claim, which action is still pending. On September 27, 1967, procedures of abatement were executed by the Internal Revenue Service with respect to the assessment of Federal income taxes, penalties, and interest, made on March 10, 1961, as it applied, in entirety, to Anne for the taxable years 1955 through 1959. On the same date, procedures of abatement were also executed by the Internal Revenue Service, with re- spect to the aforementioned assessment as it applied to Emmett, down to an amount which reflected the Federal income taxes, penalties, and interest against his one- half portion of the community income for the taxable years 1955 through 1959, inclusive. OPINION Petitioners argue that no deficiency exists under sec- tion 6211 (Definition of a Deficiency) because the re- Some an — 64 spondent failed to abate the assessment made against Anne on March 10, 1961, pursuant to the execution of the waiver agreement (Form 870) executed by her hus- band on January 11, 1961. Respondent agrees that the assessments made on March 10, 1961, were invalid and void as against Anne. As we understand petitioners, it is their contention that the void assessment must be abated by the respond- ent under section 6404 before there can be a valid defi- ciency under section 6211, since no deficiency can exist if the determination of the tax due is less than the amount previously assessed. We disagree. As we read both the statute and the regulations pro- mulgated under section 6211 and 6404, we find that the Secretary or his delegate is not required to abate an invalid and void assessment in order to assert a defi- ciency. Of course there may be a question as to whether an assessment is invalid and void, but in the instant case petitioners and respondent are both in agreement on this point. “Section 6404 does not impose a duty on the District Director to abate improper assessments * * *, Its thrust is permissive, not mandatory.” Poretto y. Usry, 295 F. 2d 499, 501 (C.A. 5, 1961). The fact that the assessment may have been valid against Emmett is of no consequence in the instant case, when Anne neither consented to the execution of Form 870 nor authorized Emmett to act on her behalf. Cf. Marie A. Dolan, 44 T.C. 420 (1965). We hold that a valid and proper determination was made herein as against Anne. Issue 3. Transferee Liability FINDINGS OF FACT Anniebel Taylor Goyne (hereinafter sometimes re- ferred to as Anniebel), mother of Anne and Jane, died on November 5, 1964. On December 23, 1964, Anne conveyed all of the real estate inherited by her from her mother, to Jane. 65 On November 14, 1964, $2,402.78 was transferred from the account of Anniebel with the Ruston Building & Loan Association, to Anne’s account with that same association. On December 23, 1964, Anne withdrew $2,676.81, the balance of her account, from the Ruston Building & Loan Association, and transferred to her sister, Jane, $1,721.21. The above transfers to Jane were made without con- sideration, and there was no agreement between Anne and Jane for any retransfer. On February 1, 1965, Anne executed Form 433-AB (“Statement of Financial Condition and Other Informa- tion”) showing assets of $2,250 and liabilities of $1,081.20, exclusive of the deficiencies determined here- in. A supporting statement to such Form 433-AB reads in part: On December 23, 1964 [I] transferred to my sister, Mrs. Jane G. Sims, without consideration the following: I. My undivided one-half interest in the follow- ing real property which was acquired by inheritance from my mother in November, 1964: * * * a Value of my one-half interest in mother’s succession Description: Total value of real property $9,550.00 II. Cash in savings account in Ruston Building & Loan Association, Ruston, La., $1,721.21. The foregoing assets were transferred to my sis- ter on the recommendation of my attorney who had just closed my mother’s succession in November, 1964, approximately one month prior to receipt on December 19, 1964, of the Final Notice Before Seizure for 1954 income tax. Prior to closing my mother’s succession, I dis- cussed with my attorney the matter of the income 66 tax liability for 1954 through 1959. He advised that I could renounce my interest in the succession and thus pass my interest in mother’s estate di- rectly to my two children. However, as it had been over two years since I was contacted by Internal Revenue Agent, Deuel C. Smith, in regard to Sign- ing with my former husband on his Offer in Com- promise, and I had heard nothing since, he felt that the matter was settled and therefore put me in possession. Then, after I received the Notice on December 19, 1964, he felt that to protect my in- terest, the foregoing assets should be transferred which would leave me in the same financial status as if I had renounced my interest in mother’s estate. OPINION Respondent in his notice of deficiency to Jane, deter- mined that she was liable as a transferee of property from Anne for deficiencies in income taxes and the addi- tions thereto determined against Anne and the taxable years 1955 through 1959, Petitioners do not contest any of the basic facts, or Jane’s liability as a transferee, except to argue: [Anne’s] transfer was of her separate property. Since the liability for income taxes on the commu- nity income was a community debt which she [Anne] could not be required to satisfy out of her Separate property, in view of her nonacceptance of the community; her transfer of separate property to Mrs. Sims cannot be said to * * * [constitute her] a transferee. This is the identical argument made by the petitioners in issue 1, and we reject it for the reasons there ex- pressed. Jane’s liability as transferee will be computed in conformity with our holdings on the other issues. Decisions will be entered under Rule 50. 67 DECISION TAX COURT OF THE UNITED STATES Filed: March 19, 1969 Docket No. 6740-66 ANNE GOYNE MITCHELL, PETITIONER versus COMMISSIONER OF INTERNAL REVENUE, RESPONDFNT Pursuant to the opinion of the Court filed January 27, 1969, and incorporating herein the facts recited in the respondent’s computation as the findings of the Court, it is ORDERED and DECIDED: That there are deficien- cies and additions to the tax due from the petitioner as follows: Addition to Tax eae Sec. 6651(a) Sec. 6653(a) Sec. 6654 Year Income Tax 1954 Code 1954 Code 1954 Code 1955 $ 323.00 $ 80.75 $16.15 $ — 1956 1,267.73 316.93 63.39 35.49 1957 453.00 113.25 22.65 12.68 1958 1,750.71 425.02 87.54 47.00 1959 871.34 173.24 43.57 17.27 /s/ BRUCE M. FORRESTER Judge Entered: Mar. 19, 1969 * * * * It is hereby stipulated that the foregoing decision is in accordance with the opinion of the Court and the respondent’s computation, and that the Court may enter this decision, without prejudice to the right of either 68 party to contest the correctness of the decision entered herein. (Signed) PAUL K. KIRKPATRICK, JR. Paul K. Kirkpatrick, Jr. Counsel for Petitioner (Signed) RicHarD M. HAHN Richard M. Hahn Acting Chief Counsel Internal Revenue Service 1957 Income Tax $ 453.00 Addition to tax (Sec. 6651(a), 1954 Code) 113.25 Addition to tax (Sec. 6653(a), 1954 Code) 22.65 Addition to tax (Sec. 6654, 1954 Code) 12.68 Liability $ 601.58 plus interest on the above liability as provided by law from December 23, 1964, to the date of payment. 1958 Income Tax $1,700.06 Addition to tax (Sec. 6651(a), 1954 Code) 425.02 Addition to tax (Sec. 6653(a), 1954 Code) 87.54 Addition to tax (Sec. 654, 1954 Code) 47.00 Liability $2,259.62 plus interest on the above liability as provided by law from December 28, 1964, to the date of payment. 1959 Income Tax $ 692.97 Addition to tax (Sec. 6651(a), 1954 Code) 173.24 Addition to tax (Sec. 6653(a), 1954 Code) 43.57 Addition to tax (Sec. 6654, 1954 Code) 17.27 Liability $ 927.05 69 plus interest on the above liability as provided by law from December 23, 1964, to the date of payment. /s/ BRUCE M. FORRESTER Judge Entered: Mar. 19, 1969 * os * * It is hereby stipulated that the foregoing decision is in accordance with the opinion of the Court and the respondent’s computation, and that the Court may enter this decision, without prejudice to the right of either party to contest the correctness of the decision entered herein. (Signed) PAUL K. KIRKPATRICK, JR. Paul K. Kirkpatrick, Jr. Counsel for Petitioner (Signed) RicHARD M. HAHN Richard M. Hahn Acting Chief Counsel Internal Revenue Service — 70 TAX COURT OF THE UNITED STATES Docket No. 6741-66 Filed: March 19, 1969 JANE ISABELL GOYNE SIMS, PETITIONER versus COMMISSIONER OF INTERNAL REVENUE, RESPONDENT DECISION Pursuant to the opinion of the Court filed January 27, 1969, and incorporating herein the facts recited in the respondent’s computation as the findings of the Court, it is ORDERED and DECIDED: That the following state- ment shows the liabilities due from the petitioner as transferee of assets of Anne Goyne Mitchell, Ruston, Louisiana, transferor, for unpaid income taxes and ad- ditions to tax of the transferor for the taxable years 1955, 1956, 1957, 1958 and 1959: 1955 Income Tax $ 823.00 Addition to tax (Sec. 6651(a), 1954 Code) 80.75 Addition to tax (Sec, 6658(a), 1954 Code) 16.15 Liability $ 419.90 plus interest on the above liability as provided by law from December 23, 1964, to the date of payment. 1956 Income Tax $1,267.73 Addition to tax (Sec. 6651(a), 1954 Code) 316.93 Addition to tax (Sec. 6653(a), 1954 Code) 63.39 Addition to tax (Sec. 6654, 1954 Code) 35.49 Liability $1,683.54 plus interest on the above liability as provided by law from December 23, 1964, to the date of payment. 71 TAX COURT OF THE UNITED STATES WASHINGTON, D.C. Docket No. 6740-66 Filed: June 16, 1969 ANNE GOYNE MITCHELL, PETITIONER Versus COMMISSIONER OF INTERNAL REVENUE, RESPONDENT NOTICE OF APPEAL Notice is hereby given that Anne Goyne Mitchell here- by appeals to the United States Court of Appeals for the Fifth Circuit from the decision of this court entered on the 19th of March, 1969. (Signed) PauL K. KIRKPATRICK, JR. Paul K. Kirkpatrick, Jr. Hudson, Potts & Bernstein 1000 Ouachita National Bank Building Counsel for Anne Goyne Mitchell TAX COURT OF THE UNITED STATES WASHINGTON, D.C. Docket No. 6741-66 Filed: June 16, 1969 JANE ISABELL GOYNE SIMS, PETITIONER versus COMMISSIONER OF INTERNAL REVENUE, RESPONDENT NOTICE OF APPEAL Notice is hereby given that Jane Isabell Goyne Sims hereby appeals to the United States Court of Appeals for the Fifth Circuit from the decision of this court entered on the 19th day of March, 1969. (Signed) Paut K. KIRKPATRICK, Jr. Paul K. Kirkpatrick, Jr. Hudson, Potts & Bernstein 1000 Ouachita National Bank Building Counsel for Jane Isabell Goyne Sims 73 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 28163 ANNE GOYNE MITCHELL, PETITIONER-APPELLANT -&, COMMISSIONER OF INTERNAL REVENUE, RESPONDENT-APPELLEE JANE ISABELL GOYNE SIMS, PETITIONER-APPELLANT vw. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT-APPELLEE Appeals From the Decisions of the Tax Court of the United States (Louisiana Case) (June 23, 1970) Before AINSWORTH, DYER and SIMPSON, Circuit Judges DYER, Circuit Judge: These appeals from the Tax Court involve the question of a wife’s liability out of her separate property for federal income taxes on com- munity income earned when she and her husband were residents and domiciliaries of Louisiana, a community property state. The Tax Court held that the wife is liable for the tax on one-half of all the community in- come regardless of whose efforts produced the income for the community and even though the wife did not file a return, renounced the community and received none of the community property upon the dissolution of the community. The Tax Court also held the wife liable for statutory penalties imposed by §§ 6651, 6653 and 6654 of the Internal Revenue Code of 1954.' The Court ‘Penalties under §6651(a) are imposed for failure to file a return, under § 6653(a) for negligent failure to pay taxes that are due, and under § 6654 for failure to file estimated tax returns and pay the estimated taxes. Siticinasiiininensiesisenieniiciasensivatsiiaiibdl 74 further held the transferee of the wife’s separate prop- erty liable for the taxes under § 6901 of the Code. We disagree on the initial question of the wife’s liability for the taxes and therefore reverse on all issues. Anne and Emmett Mitchell were married on Septem- ber 22, 1946. During the taxable years in question they lived under the Louisiana community of acquets and gains. For the taxable years beginning January 1, 1955, and ending on December 31, 1959, neither Mrs. Mitchell nor her husband filed federal income tax returns. Dur- ing 1955 and 1956 Mrs. Mitchell was employed ¢s a teacher and received salaries of $2700 and $1500 for the respective years. Income taxes were withheld from this income. It was stipulated that during the years in question all the income earned by both Mrs. Mitchell and her husband constituted community income and the amount of this income is not in dispute. The Tax Court found as a matter of fact that Mrs. Mitchell did not know of her husband’s finances and relied upon his as- surances that their tax returns were timely filed and their taxes properly paid. She assumed that he signed her name to the income tax returns. Mrs. Mitchell began living apart from her husband in July, 1960. On March 10, 1961, the Commissioner assessed income taxes and penalties against Mr. and Mrs. Mitchell. It was stipulated that Mrs. Mitchell did not receive or have knowledge of this assessment. On September 4, 1961, Mr. and Mrs. Mitchell were judici- ally separated and on September 18, 1961, Mrs. Mitchell renounced the community of acquets and gains pursu- ant to Article 2410 of the Louisiana Civil Code? Mr. and Mrs. Mitchell were divorced on October 11, 1962. In 1964 Mrs. Mitchell inherited an undivided interest in her mother’s estate. On December 23, 1964, she trans- ferred this interest to her sister, Mrs. Jane Sims, with- out consideration. Thereafter, on September 30, 1966, * Article 2410 provides: “Both the wife and her heirs or assigns have the privilege of being able to exonerate themselves from the debts contracted during the marriage, by renouncing the part- nership or community of gains.” 75 the Cominissioner determined that additional deficiencies existed. The Tax Court held that under the Louisiana com- munity property system the wife has such rights, claims and powers in the property and income of the marital community as are equivalent to ownership. This owner- ship interest made Mrs. Mitchell liable for one-nalf of the tax due on the community income for the period in - question. The Court held that her renunciation of the community did not affect the tax liability because it read Article 2410 of the Louisiana Code as allowing the wife to exonerate herself solely from contractual debts of the community, whereas the tax liability was imposed by law. The Tax Court also held Mrs. Mitchell liable for the penalties imposed by § 6651(a) of the 1954 Code for failure to file tax returns for the years in question be- cause she did not have reasonable cause to rely on her husband’s assertions that he had filed the returns. Pen- alties under § 6653(a) were also assessed because the Tax Court held that she acted negligently in failing to pay taxes that were due, The Tax Court further im- posed penalties under § 6654 for failing to file estimated tax returns and pay the estimated taxes for each of the years 1955 through 19593 It was stipulated by both parties in the Tax Court that if Mrs. Mitchell Were liable out of her separate property then the transferee without consideration of * The Court determined the total liabilities for the years in ques- tion as follows: Addition to tax Year Income tax §6651(a) §6653(a) _-§ 6654 1955 $ 323.00 $ 80.75 $16.15 _ 1956 1,267.73 316.98 63.39 $35.49 1957 453.00 118.25 22.65 12.68 1958 1,750.71 425.02 87.54 47.00 1959 871.34 173.24 48.57 17.27 plus interest on the above liabilities on provided by law f cember 23, 1964, to the date of paym og y law from De- _ 76 that property would likewise be liable. The Tax Court therefore found Mrs. Sims, the transferee, liable. It is, of course, incumbent on us to examine Louisiana law to determine the nature and extent of the commu- nity interest owned by the wife because the state law determination of this interest is binding on federal courts in the adjudication of federal tax controversies, Poe v. Seaborn, 1930, 282 U.S. 101, 51 S. Ct. 58, 75 L, Ed. 239; Bender v. Pfaff, 1930, 282 U.S. 127, 51 §. Ct. 64, 75 L. Ed. 252; see also Commissioner v. Estate of Bosch, 1967, 387 U.S. 456, 87 S. Ct. 1776, 18 L. Ed. 2d 886, and Commissioner v. Hyman, 5 Cir. 1948, 185 F. 2d 49. Under Louisiana law the wife has a prevent, vested ownership interest in one-half of the community prop- erty, including its income. United States Fidelity and Guaranty Co. v. Green, 252 La. 227, 210 So. 2d 328 (1968) ; Phillips v. Phillips, 160 La. 813, 107 So. 584 (1926). Because of this vested interest in the income the Commissioner contends that Mrs. Mitchell is liable individually, and out of her separate property, for in- come taxes on one-half of the community’s income. How- ever, the bare characterization of this ownership inter- est as vested is not determinative of the issue. Under the law of Louisiana the wife does not own the income in a separate capacity. She owns the income only deriva- tively through her one-half ownership interest in the community. It is the community which owns the income and owes the community debts. Poe vy. Seaborn, supra; Bender v. Pfaff, supra; Messersmith v. Messersmith, 229 La. 495, 86 So. 2d. 169 (1956). If the community owns the income it also owes the tax since it is axiomatic that income is taxed to the owner thereof. Helvering vy. Horst, 1940, 311 U.S. 112, 61 S. Ct. 144, 85 L, Ed. 75. The Commissioner contends that the liability for income taxes is not a community debt. However, the Supreme Court of Louisiana held to the contrary in Messersmith vy. Messersmith, supra, where the court said: “[{A]ll sums expended for income tax * * * must be held to be debts of the community 77 and to be payable out of community funds.” Jd. at 176. See also Tate v. Tate, 12 So. 2d 506 (La. Ct. App. 1948). Note, Creditor’s Rights, 25 La. L. Rev. 201 (1964). The question then is whether we should “look through” the community concept and hold the wife liable for a com- munity debt because she is the owner of an interest in the community. The wife does not have control or management of the community property until dissolution of the community. Agar v. Agar, 239 La. 941, 120 So. 2d 485 (1960) and this is true even if the husband is absent from the home. Grandeson v. International Harvester Credit Corp., 223 La. 504, 66 So. 2d 317 (1953). During the existence of the community the husband can alienate the property without her consent. La. Civ. Code Article 2404; Pitre v. Pitre, 247 La. 594, 172 So. 2d 693 (1965). As a corollary of his almost exclusive control over the com- munity property the nature of the wife’s interest in the community is such that the burdens cannot, unless she expressly binds herself, be satisfied out of her separate property. La. Civ. Code Article 2403. It is only when the community is dissolved and she does not renounce the community that the nature of her interest becomes such that it can burden her separate property. Beal v. Ward, 13 La. App. 191, 127 So. 423, 1930. Therefore, since income taxes on community income are community debts, Messersmith, supra, the wife’s renunciation of the community is not academic. Mrs. Mitchell was not at- tempting to relieve herself of a debt which she had al- ready incurred, as the Government argues, but was avoiding the assumption of a liability which was the liability of the community and which was to be acquitted out of community funds. Article 2403 of the Louisiana Civil Code establishes the principle that there are separate debts and commu- nity debts which must be acquitted out of the respective funds: [T]he debts contracted during the marriage enter into the partnership or community of gains, and must be acquitted out of the common fund, whilst oe 9 eto a 78 the debts of both husband and wife, anterior to the marriage, must be acquitted out of their own per- sonal and individual effects. App. 1960); accord, Personal Finance, Inc. v. Simms, 148 So, 2d 176 (La. Ct. App. 1962); Brock Furniture Co. v. Carroll, 86 So. 2d 715 (La. Ct. App. 1956). Although the community is not a taxpayer the courts have recognized the underlying concept of the community as an entity in tax cases. Commissi v. Chase Man- alet, E.D. La. 1952, 104 F, Supp. 20, affd 202 F. 2d 433, cert, den. 346 U.S. 820 ( 1953). The Commissioner as- the community is similar to a partnership and the “pass through” provisions of partnership income taxation should apply. The community of acquets and gains, is, however, not similar to an ordinary commercial partner- ship because the wife may renounce it and thereby ab- solve herself of all debts of the community, retroactively. Court said: Such a partnership does exist in contemplation of law, but only, we apprehend, when she accepts the community; if she renounces it, the community is, as to her, as though it never existed, and everything done during the marriage in relation to the pu: - chase or alienation of property must be considered as done by the husband alone. 79 The Commissioner relies on those United States Su- preme Court cases* which held that the husband is not required to report the whole community income on his individual return as authority that the wife is liable for one-half of the taxes. This reliance is misplaced. Bender and Poe did not hold that the wife was required to re- port the income but rather that she had a sufficient in- terest in the community income to entitle her to report one-half of the community income. The real significance of the finding of a vested ownership in the wife in Bender was not to make her separately liable but to rebut the Commissioner’s reliance there on cases such as Lucas v. Earl, 1930, 281 U.S. 111, 50 S. Ct. 241, 74 L. Ed. 731, where the factor of who earned the income was held determinative of who owed the tax. The holding of Bender is consistent with Louisiana law. Where the husband and wife are living under the community of acquets and gains the wife may assume the liabilities of the community and be liable for such assumption out of her separate property. La. R.S. 9:103 (1950) ; Friendly Loans, Inc. v. Morris, 142 So. 2d 810 (La. Ct. App. 1962). But to extend Bender to require the wife to report the income would be destructive of the Louisiana system of community property without any clear statutory authorization. This we refuse to do. The case at hand is also distinguishable from those cases cited by the Commissioner where the wife, after having signed a return, was held liable for one-half of the income tax. E.g., United States v. Malcolm, 1931, 282 U.S. 792, 51 S. Ct. 184, 75 L. Ed. 714; Commis- sioner v. Hyman, 5 Cir. 1948, 185 F. 2d 49; Saenger v. Commissioner, 5 Cir. 1934, 69 F. 2d 683. Since the wife in those cases had signed a return she had assumed the liability for the tax. Therefore the issue of her lia- bility for the tax was not in dispute. * Poe v. Seaborn, supra; Bender vy. Pfaff, supra. 5’ We are not convinced that Smith v. Donnelly, E.D. La. 1946, 65 F. Supp. 415 decided otherwise. There was no mention in Smith of a return but the court cited Saenger and Hyman as the only authority for its sweeping conclusion that the wife is liable for one-half of the income tax of the community, ’ 80 Mrs. Mitchell might have been held liable for the in- come taxes if she had accepted the benefits upon the dissolution of the community. She elected, however to renounce the community pursuant to Article 2410 of the Louisiana Civil Code which specifically provides that such renunciation exonerates her from all “debts con- tracted during the marriage.” We are not persuaded by the Commissioner’s assertion that the term “debts con- tracted during the marriage” should be limited to debts created by contract. In discussing the term “debts con- tracted” Planiol, 3 Civil Law Treatise, Part 1, § 1086 (1959) would read the term to mean debts incurred by any means, whether contract, tort or statute. This in- terpretation of the term is more in keeping with the purpose of the renunciation provision—to protect the wife’s separate property from onerous debts of the com- munity which the husband incurred and did not satisfy, factors over which the wife had no control. Under Louisiana law, absent the willingness of the husband to divulge to the wife information concerning the financial status and affairs of the community, she has no way of knowing nor means to compel him to inform her of the community’s assets, liabilities or in- come. She could neither prepare a return showing the community income nor pay the tax. She has no power to guarantee that the community will be solvent enough to satisfy the tax liability. As a result, if she is held * Article 2404 of the Louisiana Civil Code requires that in order for the wife to have an action against the-husband for fraudulent disposition of the community assets said disposition must be made with an “intent to injure the wife.” As the United States Supreme Court pointed out in Fernandez vy. Wiener, 1945, 826 USS. 340, 349, n. 7, 66 S. Ct. 178, 90 L. Ed. 116: “Where the husband has aliened some part of the community in fraud of his wife's rights, she or those representing her have an action for reim- bursement against the husband or his representatives upon the termination of the community, but not before, Guice v. Lawrence, 2 La. Ann, 226, 228. The fraud required for an action of this kind seemingly must be intentional and the motive for the transaction.” [Emphasis supplied.] See also Thigpen v. Thigpen, 281 La. 206, 91 So. 2d 12 (1956). Although the wife may obtain a judicial separation of property 81 liable for the income taxes, she may have no property with which to satisfy the debt unless the community is dissolved in a solvent state, a factor over which she has no control. Even if the community is solvent it is im- possible for the wife to reach its assets until its dissolu- tion because under § 2403 of the La. Civ. Code a sepa- rate debt (which is what the Commissioner is asserting against Mrs. Mitchell) may not be acquitted out of the community fund. Thus, as pointed out in U.S. v. Rob- bins, 1926, 269 U.S. 315, 328, 46 S. Ct. 148, 70 L. Ed. 285, “(T]he fund taxed, while liable to be taken for his debts, is not liable to be taken for the wife’s * * * so that the remedy for her failure to pay might be hard to find.” If Mrs. Mitchell had not fortuitously inherited property from her mother she would not have obtained any assets with which to satisfy the tax liability and the problem recognized in Robbins would have been real —Mrs. Mitchell would be liable for taxes for which she would be powerless to obtain the funds to pay. Our holding does not leave the Commissioner without recourse. Under Louisiana law the husband is liable for the community debts that may be satisfied both out of the community and out of his separate property. Poin- dexter v. Louisiana & A, Ry. Co., 170 La. 521, 128 So. 297 (1930); Rouchon v. Rocamora, 84 So. 2d 873 (La. Ct. App. 1956) ; Gosserand v. Monteleone, 164 La. 397, 118 So. 889 (1927). The rationale for this liability is not that the husband’s ownership interest in the com- munity should subject him to such liability but rather that as head and master of the community he should be liable for the debts he has incurred with respect to com- munity property, and that it would be inequitable to re quire the creditor to distinguish between the community property and the husband’s seperate property. Note, Creditor’s Rights, 25 La. L. Rev. 201 (1964). without dissolution of the marriage this remedy is difficult to ob- tain and somewhat illusory because the wife must show prior mismanagement and thus the funds may have already been dis- sipated. 82 The Commissioner’s contention that Mrs, Mitchell in. curred the statutory penalties under §§ 6651, 6653 and 6654 of the Code fails because she was under no duty to file a return under § 6012 of the Code since she had no separate income. Since Mrs. Mitchell owes no tax obviously her trans- feree, Mrs, Jane Sims, does not either, Reversed. SIMPSON, Circuit Judge, dissenting: I respectfully dissent. I would affirm the Tax Court upon the basis of its opinion, reported at 51 T.C. No. 62. 83 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT OCTOBER TERM, 1969 No. 28163 T.C. Docket Nos. 6740-66 and 6741-66 ANNE GOYNE MITCHELL, PETITIONER-APPELLANT v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT-APPELLEE JANE ISABELL GOYNE SIMS, PETITiONER-APPELLANT Vv. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT-APPELLEE Appeals From the Decisions of the Tax Court of the United States (Louisiana Case) Before AINSWORTH, DYER and SIMPSON, Circuit Judges JUDGMENT This cause came on to be heard on the transcript of the record of the Tax Court of the United States, and was argued by counsel; ON CONSIDERATION WHEREOF, It is now here ordered and adjudged by this Court that the decisions of the said Tax Court in this cause be, and the same are hereby reversed. It is further ordered that respondent-appellee pay to petitioners-appellants, the costs on appeal to be taxed by the Clerk of this Court. SIMPSON, Circuit Judge, dissenting. 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LIEN FoR TAXES ner prescribed in subsection (ca) of this section, the 2 en po RS cae f lien sholl not be valid with respect fo o security, as- UNITED STATES ce a “If ony person lioble to poy any tox neglects or defined in porograph (2) of this subsection, as - & a mae - refuses to poy the some ofter demond, the amount against any mortgagee, pledgee, or purchaser of such ; Mey eS Sat | c ‘ , . lifcluding ony interest, additional amount, addition security, for an adequate and full consideration in as es ke kee he . ; : . " to tox, or ossessable Penalty, together with any costs money or money's worth, if at the time of such mort- a See ae aay? pe Pies "= thet moy acerve in eddition thereto) sholl be a lien goge, pledge, or purchase such mortgagee, pledgee, Pe. | WS. OS . in fovor of the United Stotes upon all property ond or purchoser is without notice or knowledge of the Se ea ie = pee cae rights to property, whether real or personal, belong- existence of such lien. Sines eS A a ie 3 Ing to such person, ; ; : oP : t ; a Se “3 eo merge (2) Definition of Security.--As used In this “. er oer = ’ ' a . se. 6322. PERICD OF LIEN. subsection, the term “security” means any bond, = ; : oe ae eae oe debenture, note, or certificate or other evidence of a ' ee . - Se a a, , Unless onother dote ts specificolly fixed by indebtedness, issued by any corporation {including ~, . - et es: Bid = ’ low, the lien imposed by section 6321 sholl arise at one issued by a government or political subdivision is. F a oo rae ! ee the time the assessment is made ond shall continue thereof), with interest coupons or in registered form, - ‘ a “ “ until the liability for the omount so ossessed is satis- shore of stock, voting trust certificate, or any certifi. a9 ( , an ar Tek & fied or becomes unenforceable by reason of lapse of cote vf interest or porticipotion in, certificate of ~ : papain ier aed . ; ae “~~ Ce, :- = : 2 ee ee het tae eet deposit or receipt for, temporary or Interim certifi- a ls ak. eee, aid ae oe : cate for, or warrant or right to subscribe to or pure os Gees a ene amare "SEC. 6323. VALIDITY AGAINST MORTGAGEES, chase, any of the foregoing; Ne NF NOTICE OF T AX LIEN xc: ; - PLEDGEES, PURCHASERS, AND JUDGMENT - baal deal w 4 ‘ pak . 2 CREDITORS, ail ce : ‘. - y 2 ° : Be Tia ike ‘eee : [d) DISCLOSURE OF AMOUNT OF OUTSTAND- 3 ; — eo ae aa ING LIEN.--If @ notice of lien hos been filed under ~.. re a ars ee OE ars a: ag! +3 ‘fa) INVALIDITY OF LIEN WITHOUT NOTICE... subsection (a), the Secretary or his delegcte is au- a: * F gtiscae oe ae ee ee ie ee RS TEE Except as otherwise Provided in subsection (c), the thorized to provide by rules or regulations the ex- = . ; iia ee ont ~| : lien imposed by section 6321 shall not be valid as tent to which, ond the conditions under which, Infore > , ee Fe lee Newas Er eee A ogainst any mortgocee, pledgee, purchoser, or Judg- mation os to the omount of the outstanding obliga- - > Sate » eS ee ae ve ment creditor until notice thereof hos been filed by tion secured by the lien may be disclosed. v8 8 “- i _ e © * hie Pen eel the Secretory or his delegate— -.. 1. eer ¥ Avig © The en oe ee 5 ~| See SEC. 6325. RELEASE OF LIEN OR PARTIAL DIS > ee re ae, 4 4 a ths * (1) Under State or Territorial Lows.--In the ‘CHARGE OF PROPERTY. ee thee. led thi Soe x : len f office designated by the low of the State or Territory . A .. ame: :3. = i this ay o : ' In-which the property subject to the lien is situated, : co (1) Licbility Sotisfied or Unenforceable.--The ‘~ j Lj i WO . ; “+ “Hen ls situated, whenever the State or erritory has : rer a ‘ Z ane t | ¥ Getor ~—_ 7 .* net by low designated an office within the State or wagner flon delegote finds thot the a "= . : ‘ : the omount ossessed, together with all interest in re- ‘42 Territory for the filing of such Notice; or f AcRiS spect thereof, has been fully satisfied, hes become ‘ legolly unenforceable, or, in the cose of the estate : (3) With Clerk of District Court for District tox imposed by chopter 11 or the gift tox imposed by ORM 668 (REV. LTO) ne wee le ~~" "ef Columbia.--In the office of the clerk of the United ~ ~~“ chapter 12, has been fully satisfied or provided for FRR NE 4 eockarees te - States District Court for the District of Columbia, i ft ay ts a Recoroet © ty i if the property subject to the lien is situoted in eae oa) ; ‘ hus ee "3 2 : . : ja - * “sudnt fo subsection (a!/1) is in such form as would be assessed, together with all interest in respect thereof, Pps rege LS : a lew: ‘* « eee if filed with the clerk of the United States within the time prescribed by low lincluding ony ex. a ‘ i ES oN, .¥ distcict court:pursuant to subsection (a)(2), such Notice tension of such time), ond thot is in occordence ; es 2 ey ie, ai . , shall be valid notwith, standing ony low of the Stote with such requirements reloting to terms, conditions, . agents ; , - a regarding ihe form or content of a notice ond form of the bond and sureties thereo , sy = ° e- ° on, - os be specified by such rules or regulations, tharchta , , H 4 f A LDA MEG SCTE Rtas Aaah ‘Si D [0 ("9-5 "ARW) Y-GOQ MMOs Gifs: SANIATE TWNURLNI OL GINUNLTE 3a OL — | ANE {44917450 3NN3 ai ? Aqozey |} EueaTIg men *990e196 UNOS 0097 JDIAWIS JO ALVDIdILYID aa ae. | * *paT A amezeey 0729 Fa oyoergds OTTeFuy seoue.zy _ GeAedxe 30 ssouppy pue owen) 4 eey ‘cuLeTIp MON 5 ofoeisds your 4 pue + B Sf (/. +Z ¢ : = [iis 2 ; YOK AO “ALOZ Mon 3 Zul Joe ; pnts. iol Z2\. kK ig ie fuvdmoy souwmeny eT] uezplodorzey J Wp t xa & ws ; : Mtn ‘ AAD AO SDILON eases eae ADIAMSBS BOANBABM AVYNNSANI — ANZWAuNvwasa AunNnGwau.‘*s°n = ee. 101 HEARING ON MOTION OF UNITED STATES TO INTERVENE AND MOTION OF UNITED STATES TO DISMISS AND ORDER GRANTING BOTH MOTIONS MINUTE ENTRY: CHRISTENBERRY, J. June 7, 1967 {Number and Title Omitted] This cause came on this day for hearing on motion of United States to intervene and motion of United States i> dened PRESENT : Patrick M. Schott, Esq. Attorney for Plaintiff Ernest N. Morial, Esq. Assistant U. S. Attorney IT IS ORDERED that the motion of United States to intervene be, and it is hereby, GRANTED. IT IS FURTHER ORDERED that motion of United Siaies to dismiss be, and it is hereby, GRANTED. ANSWER TO PETITION IN INTERVENTION {Number and Title Omitted] {Filed: Jan. 2, 1968] Now into Court comes defendant in intervention, Mrs. Frances Angello, widow of Jack Sparacio, hereinafter referred to as “Mrs. Sparacio” to make the following defenses to the petition in intervention filed by the United States of America herein. 102 FIRST DEFENSE The property on which the United States is seeking to enforce a lien consists of a sum of money owed by Metropolitan Life Insurance Company on an insurance policy on tlie life of Mrs. Sparacio’s husband and in which Mrs. Sparacio was the beneficiary. These funds are therefore the property of Mrs. Sparacio and no one else’s. SECOND DEFENSE The assessment made against Mrs. Sparacio as set out in paragraph III of the petition in intervention were made wrongfully, erroneously and illegally against Mrs. Sparacio for the following reasons: 1. The tax liabilities were Mrs. Sparacio’s husband's and not hers and should have been based upon separate tax returns signed and filed by him alone. 2. The Internal Revenue Service secured Mrs. Spa- racio’s signature on joint returns by meai.. of such rep- resentations and under such circumstances that she was misled, made the victim of her own ignorance of the law and prevented from having competent legal advice as warranted by the facts and circumstances of the case. 8. The tax liabilities could not have been assessed against Mrs. Sparacio without the aforesaid wrongful procurement of her signature on joint returns for the years set out in paragraph III of the petition. THIRD DEFENSE Mrs. Sparacio is justified under the facts and law ap- plicable thereto in her refusal to pay these tax liabilities which are her husband’s and not hers. WHEREFORE, Mrs. Sparacio prays: 1. That the Court dismiss the claim of the United States as to the life insurance proceeds. 2. That the lien of the United States on the proceeds of the insurance policy be cancelled. Pt le eh! 3 : ; i 103 3. That the defendant in intervention be awarded all of said proceeds due by the Metropolitan Life Insurance Company under the said insurance policy. 4. For all general and equitable relief. REUTER. KEUTER & SCHOTT Attorneys for defendant in intervention 1607 N.B.C. Building New Orleans, La. 70112 By /s/ Patrick M. Schott PATRICK M. SCHOTT Trial Atty. - - -000- - - INTERROGATORIES [Number and Title Omitted] {Filed: April 30, 1968] In accordance with the provisions of Rule 33 of the Federal Rules of Civil Procedure, the United States of America, intervenor, by its attorney, Louis C. LaCour, United States Attorney for the Eastern District of Lou- isiana, requires the plaintiff, Mrs. Frances Angello, to answer the following interrogatories separately, fully, in writing, under oath, and signed within fifteen (15) days of service hereof: 1. If you do not admit each and every statement con- tained in the Request for Admissions, Nos. 1 through 12, inclusive, filed herein, explain and specify in detail in what respect any statement not admitted is believed to be untrue, and what you believe to be the correct facts in this regard. 2. If you do not admit each and every statement con- tained in the Request for Admissions, Nos. 1 through 12, inclusive, filed herein, list the documents or records 104 of any nature which Support or tend to support your denial of any such statement. In answering this inter. rogatory, you are to include the names and addresses of © person or persons having possession, custody or con- | trol of such documents or records. oe 3. If you do not admit each and every statement con- tained in the Request for Admissions, Nos. 1 through 12, inclusive, filed herein, list the names and addresses of any person or persons who have knowledge of any fact or facts which Support or tend to support your de nial of any such statement. 4. State the amount and source of your income for the year 1959. 5. State the source and amount of your income for the year 1960. 6. State the source and amount of your income for the year 1961. Louis C. LaCour United States Attorney By /s/ James Carriere Assistant United States Attorney ---000- - - REQUEST FOR ADMISSIONS (Number and Title Omitted] (Filed: April 30, 1968] Pursuant to the provisions of Rule 36, Federal Rules of Civil Procedure, the United States of America, by its attorney, Louis C. LaCour, United States Attorney for the Eastern District of Louisiana, requests the plain- tiff, Mrs. Frances Angello, within ten ( 10) days after service of this request, to make the following admissions for the purpose of this action only: 1. That during the years 1959, 1960 and 1961, you were married to Jack Sparacio. 2. That during the years 1959, 1960 and 1961, you resided in the State of Louisiana. 105 8. That you filed no income tax return for the year 1959. 4. That you filed no income tax return for the year 1960. 5. That you filed no income tax return for the year 1961. 6. That you have no books or records relating to the business operations and income of your deceased hus- band, Jack Sparacio, for the years 1959, 1960 and 1961. 7. That you have no personal knowledge of any facts relating to the business operations and income of your deceased husband, Jack Sparacio, for the years 1959, 1960 and 1961. 8. That on February 19, 1965, the District Director of Internal Revenue made assessments against you for your federal income tax liabilities for the years 1959, 1960 and 1961, in the total amount of $12,239.27, 9. That notice of the foregoing assessments and de- mand for payment were made upon you on February 19, 1965. 10. That a Notice of Federal Tax Lien ( Treasury Department Form 668) reflecting the foregoing liabili- ties was filed with the Recorder of Mortgages, Parish of Orleans, New Orleans, Louisiana, on April 18, 1965. 11. That you have made no payments to the Internal Revenue with respect to the aforementioned liabilities. 12. That after certain administrative adjustments, you #e currently indebted to the United States of Amer- ica for federal] income tax liabilities for the years 1959, 1960 and 1961 in amounts totaling $3,211.06, plus statu- tory interest. Louis C. LACour United States Attorney By: /s/ James Carriere Assistant United States Attorney ---000-- - 106 MOTION FOR SUMMARY JUDGMENT ON BEHALF OF DEFENDANT, METROPOLITAN LIFE INSURANCE COMPANY {Number and Title Omitted] [Filed: May 2, 1969] Defendant, Metropolitan Life Insurance Company, ap- pearing herein through undersigned counsel, moves this Court for Summary Judgment in its favor and suggests to the Court that mover holds certain insurance proceeds in the sum of ONE THOUSAND NINE HUNDRED THIRTEEN AND 88/100 ($1,913.88) DOLLARS as to which the other parties to these proceedings, Mrs. Frances Angello, widow of Jack Sparacio and United States of America, have each asserted a claim against mover and that mover holds such proceeds merely as a stakeholder having no interest in the said proceeds and that mover desires to deposit the said proceeds into the Registry of this Honorable Court in order that the other parties to these proceedings may assert their respective claims against the said proceeds; mover, therefore, asks that it be granted leave from this Honorable Court to deposit the sum of ONE THOUSAND NINE HUNDRED THIRTEEN AND 88/100 ($1,913.88) DOLLARS into the Registry of this Court and that there be Summary Judgment entered in favor of mover, Metropolitan Life Insurance Company, dismissing all claims being asserted against mover upon mover’s making the said deposit of ONE THOUSAND NINE HUNDRED THIRTEEN AND 88/100 ($1,913.88) DOLLARS into the Registry of this Court and that, upon the making of the said deposit, mover be recognized as having discharged in full all of its obligations and duties under Policy No. 620-965-303 M1 issued by mover; mover further sug- gests to the Court that an analysis of the following docu- ments, either attached to this Motion or already part of the record, will disclose that there is no genuine issue in respect to any material fact and that mover is entitled, as a matter of law, to all relief demanded: f eran eet ry PS * 2 oP oy wee Pree ENE NNT) Coane ait gal tpt SEPT MEMS IIe Pew Loy i IETS RIE INS fr Neh pena gy 2 IT SA PRES IE Tien S 107 1. The pleadings of all parties heretofore filed in this proceeding ; 2. The statement of those facts not in issue required by Rule 4E of the Local Rules of the United States District Court for the Eastern District of Louisi- ana, New Orleans Division. /s/ Phelps, Dunbar, Marks, Claverie & Sims PHELPS, DUNBAR, MARKS, CLAVERIE & SIMS Attorneys for Metropotitan Life Insurance Company 1300 Hibernia Bank Building New Orleans, Louisiana 70112 Telephone No, 529-1311 /s/ Richard C. Brown RICHARD C. BROWN Trial Attorney ORDER Considering that all counsel of record have approved and submitted without objection the above and foregoing Motion for Summary Judgment of defendant, Metropoli- tan Life Insurance Company; Let the above and foregoing Motion for Summary Judgment of defendant, Metropolitan Life Insurance Company, be granted upon defendant, Metropolitan Life Insurance Company, depositing the sum of ONE THOU- SAND NINE HUNDRED THIRTEEN AND 88/100 ($1,913.88) DOLLARS into the Registry of this Court, — sum to be held subject to the further orders of this urt. New Orleans, Louisiana, this 6th day of May, 1968. /s/ Herbert W. Christenberry United States District Judge ---000-- - ANSWERS TO INTERROGATORIES {Number and Title Omitted] [Filed: June 14, 1968] 1. The undersigned does not admit Request No. 12 and the explanation and detailed specification as to why can be found in her pleadings and in the affidavit which she has filed in this record in support of the memoran- dum in opposition to various motions filed by the United States earlier in the proceedings. 2. Same as No. 1 above. 8. The undersigned will use her own testimony to prove her contention that she does not owe the taxes along with the testimony of certain agents of the In- ternal Revenue Service, the exact identity and address of whom has not yet been determined by the under- signed. 4. None. 5. None. 6. None. /s/ Mrs. Frances Angello Sparacio Mrs. FRANCES ANGELLO Sworn to and subscribed before me this 10 day of June, 1968 /s/ [Name Illegible] Notary Public 109 ANSWER TO REQUEST FOR ADMISSIONS [Number and Title Omitted] [Filed: June 14, 1968] NOW INTO COURT comes Mrs. Frances Angello and for answers to the request for admissions served on her says: /s/ Mrs. Frances Angello Sparacio Mrs. FRANCES ANGELLO Sworn to and subscribed before me this 10 day of June, 1968. /s/ [Name Illegible] Notary Public 110 WRITTEN INTERROGATORIES {Number and Title Omitted] [Filed: July 16, 1968} NOW INTO COURT comes Mrs, Frances Angello, plaintiff, in order to propound written interrogatories to United States of America, intervenor, in accordance with the Federal Rules of Civil Procedure: 1, On what date were the income tax returns signed by Mrs. Frances Angello Sparacio, which returns were made the basis for the assessment of taxes against her in these proceedings? 2. Give the address of that place where these returns were signed. 3. Give the name and full address of the agent of the Department of Revenue who physically presented these papers to Mrs. Frances Angello for her signature. 4. Give the full educational background of that agent. 5. How long has that agent been with the Internal Revenue Service? 6. Give the names and addresses of all of the agents of the Internal Revenue Service who witnessed the sig- nature of Mrs. Frances Angello on the returns which form the basis for the assessment of the taxes in this case. 7. Give the name and address of that agent or those agents who had charge of the files and who gave in- structions to the United States Attorney handling the case of the United States against Mrs. Angello’s husband, Jake or (Jack) Sparacio, on October 7, 1964, and throughout the prosecution of the proceedings No, 29-667 in the United States District Court for the Eastern District of Louisiana. 8. Was there any basis for collection of these taxes from Mrs. Frances Angello before that date when her signature was obtained on the joint returns which form the basis for the assessment in this case? 9. Who prepared these joint returns which were signed by Mrs. Frances Angello? Give the name and address of that agent. —— 11] 10. Give the full name and address of all internal revenue service personnel who supervised that agent identified above who physically presented the joint re- turns to Mrs. Angello for her signature, 11. Did the agent of the Internal Revenue Service who got Mrs, Angello’s signature on the joint returns advise her of her right to have an attorney with whom she could consult concerning this matter? 12, Was there an attorney present at this meeting between Mrs. Angello and the agent of the Internal Revenue Service when she signed the joint return? REUTER, REUTER & SCHOTT 1607 National Bank of Commerce Bldg. New Orleans, Louisiana 70112 By: /s/ Patrick M. Schott PATRICK M. ScHoTTr Trial Attorney - - -000- - - ANSWERS TO INTERROGATORIES {Number and Title Omitted] (Filed: Aug. 22, 1968] The United States of America, by and through the United States Attorney for the Eastern District of Lou- isiana, answers the Interrogatories served upon it as follows: Interrogatories Numbered 1 through 6, inclusive and 8 through 12, inclusive: The files of the Internal Revenue Service indicate that no federal income tax returns were filed by Mrs. Frances Angello and Jack Sparacio for the years 1959, 1960 and 1961. In fact, plaintiff has 112 admitted in her Answers to Request for Admissions (Nos. 3, 4 and 5) on file herein, that she filed no income tax returns for these years. The federal tax assessments against the plaintiff are not based upon tax returns, but rather upon the imputation to her of one-half of her husband’s _ income during 1959, 1960 and 1961, pursuant to Louisiana law. Interrogatory Number 7: Revenue Agents Robert J. McCoy, Jr., and A. Martin Donovan, Jr.; Special Agent Charles H. Langhoff, Jr., all of whom are currently employed by the Internal Revenue Service, Federal Building, 600 South Street, New Orleans, Louisiana. Louis C. LACour United States Attorney By: /s/ Kathleen Ruddell Assistant United States Attorney VERIFICATION DISTRICT OF COLUMBIA ) ss CITY OF WASHINGTON ) AUGUSTUS A. SIMPSON, JR., being first duly ~ sworn, deposes and says: That he is a Trial Attorney in the Tax Division, De- partment of Justice, to whom this case has been assigned — and that the foregoing Answers to Plaintiff’s Interroga- tories are based upon information contained in the files of the Internal Revenue Service and of the Department a ———s 118 of Justice and that said answers are true and correct to the best of his knowledge. /8/ Augustus A. Simpson, Jr AuGustus A. SIMPSON, JR. Subscribed and sworn to before me this 14th day of August, 1968. /8/ Barbara R, F. Szyola Notary Public My Commission expires March 14, 1970. - - -000- - - MOTION FOR SUMMARY JUDGMENT [Number and Title Omitted] [Filed: Sept. 6, 1968] The United States of America, by and through its attorney, Louis C. LaCour, United States Attorney for the Eastern District of Louisiana, respectfully moves this Court for the entry of an order that the tax liens of the United States be foreclosed upon the fund in the amount of $1,913.88, which has been interpleaded here- in, on the ground that the pleadings, the affidavit at- tached hereto, and the answers to interrogatories and requests for admissions establish that there is no genu- ine issue of any material fact, and the intervenor, the United States of America, is entitled to judgment as a matier of law. Louis C. LACour United States Attorney By: /s/ Kathleen Ruddell Assistant United States Attorney 1l4 STATE OF LOUISIANA ) PARISH OF ORLEANS ) AFFIDAVIT Before me, the undersigned authority, personally came _ and appeared, Chester A. Usry who, after being by me first duly sworn, did depose and _ say: 1. That, I am Chester A. Usry, District Director of — Internal Revenue Service, New Orleans District, and as _ such I have the jurisdiction for collection of these ac. — counts, } 2. I certify that an assessment was made against — Jack and Frances Sparacio, 6240 Pasteur Boulevard, — New Orleans, Louisiana, for income tax and interest on — the dates, for the taxable periods, and in the amounts, — as set forth herein below: ia Type of Tax Penalty Interest Total Period Tax Assessed Assessed Assess ess 1959 Income $2,016.72 $1,059.79 $ 582.05 §$ 3,658.56 1960 Income $1,550.46 §$ 812.59 $ 354.45 § 2,717.50 1961 ‘Income $3,459.41 $1,820.51 $ 583.29 $ 5,863.21 | Totals $7,026.59 $3,002.89 $1,519.79 giz,290.27 | Date Assessed 2-19-65 2-19-65 2-19-65 The above joint assessments were based upon income attributable to Jack Sparacio, 3. I certify that the amounts now due and owing from Frances Angello for individual income tax and interest, for the taxable period 1959, 1960 and 1961, are in the amounts set forth below: 115 Assessed Period Tex Interest Totals 1959 $ 918.36 $265.05 $1,183.41 1960 $ 671.00 $153.40 $ 824.40 1961 $1,621.70 $273.43 $1,895.13 Totals $3,211.06 $691.88 $3,902.94 The amounts shown above result from the imputation to Frances Angello of one-half of the deceased husband’s business income for these said years, as computed on a separate-return basis. 4. I certify that statutory notices of and demands for payments of the aforementioned liabilities were made on the dates more fully set out as follows: Date First Notice Taxable Period and Demand Issued 1959—Income February 19, 1965 1960—Income February 19, 1965 1961—Income February 19, 1965 5. I certify that there now remains outstanding on the said assessments now due and owing from Frances Angello, the following amounts, together with interest and costs thereon, all as is more fully set out as follows: Balance Due Taxable Outstanding Rate Interest Computed as of August Period = Assessments Per Diem to August 5,1968 5, 1968 1959 $1,183.41 .000164* $190.83 $1,374.24 1960 $ 824.40 .000164 $1389.43 $ 963.83 1961 $1,895.18 .000164 $336.98 $2,282.11 $8002.9 soor2a 4.0.1 * Interest is not computed on assessed interest. Interest will accrue on these accounts at .538¢ per day after August 5, 1968. 116 6. I certify that on April 13, 1965, April 19, 1965 and July 28, 1965, Notices of Federal Tax Liens were filed with the Recorder of Mortgages, Parish of Orleans, and the Clerk of Court, Tangipahoa Parish, State of Louisiana, /s/ Chester A. Usry CHESTER A, Usry District Director Subscribed and sworn before me this 5th day of Au. | gust, 1968, /s/ William M. Lucas, Jr. Notary Public [SEAL] My commission expires at death a CRoss-MOTION FOR SUMMARY JUDGMENT (Number and Title Omitted] (Filed: Nov. 5, 1968] Mrs. Frances Angello Sparacio, through her attorney, Patrick M. Schott, moves the Court for summary judg- ment in her favor dismissing the claim of the United States as to the fund on deposit in the amount of One Thousand Nine Hundred Thirteen and 88/100 ($1,918.88) Dollars, cancelling the lien of the United States on said fund and awarding it to her on the ground that the pleadings and affidavits on file herein show that there is no genuine issue of any material fact, and Mrs. 117 Frances Angello Sparacio is entitled to judgment as a matter of law. REUTER, REUTER & SCHOTT Attorneys for Mrs. Frances Angello Sparacio 1607 National Bank of : Commerce Bldg. . New Orleans, Louisiana 70112 | By: /s/ Patrick M. Schott PATRICK M. SCHOTT Trial Attorney — ope HEARING AND SUBMISSION ON MOTION OF U. S. OF AMERICA FOR SUMMARY JUDGMENT AND CROSS-MOTION BY PLAINTIFF FOR SUMMARY JUDGMENT MINUTE ENTRY: CHRISTENBERRY, J. November 27, 1968 [Number and Title Omitted] This cause came on this day for hearing on motion of the U. S. of America, intervenor, for summary judg- ment, and cross-motion by plaintiff for summary judg- ment as to claim of the United States re funds on de posit. | PRESENT: Patrick M. Schott, Esq. Attorney for Plaintiff Charles H. White, Esq. Attorney for defendant, U.S.A. Argument: SUBMITTED. 118 ORDER GRANTING MOTION OF INTERVENOR FOR SUMMARY ; JUDGMENT AND ORDER DENYING PLAINTIFF'S CROs F MOTION FOR SUMMARY JUDGMENT F 4 MINUTE ENTRY CHRISTENBERRY, J. March 28, 1969 f (Number and Title Omitted] Hi This cause came on on a former day on motion of — intervenor, United States of America, for summary judg. \3 ment in its favor allowing it to foreclose the t [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0303%3A1. Public record. Not legal advice.