305 Mass. 20 | Mass. | 1940
This is an appeal by Maude Staples, herein referred to as the taxpayer, from a decision of the Appellate Tax Board. G. L. (Ter. Ed.) c. 58A; St. 1937, c. 400.
The taxpayer is an inhabitant of this Commonwealth. In her income tax return, filed in the year 1937, for the calendar year 1936, she reported the sum of $18,000 as “Income received during the year from taxable annuities,” and the sum of $8,817.92 as “interest or dividends taxable and received by an executor, administrator, trustee or other fiduciary not subject to taxation in Massachusetts and paid to me during the year.” The commissioner of corporations and taxation assessed an income tax on the taxpayer on the basis of income so reported. See G. L. (Ter. Ed.) c. 62, §§ 1, 5, 11, 35. See also St. 1937, c. 422. Later he made an additional assessment (see G. L. [Ter. Ed.] c. 62, § 37, as amended) on the basis that the amount reported by the taxpayer as income received from annuities was taxable at the rate of six per cent (apart from the tax imposed by St. 1937, c. 422) under the provisions of G. L. (Ter. Ed.) c. 62, §§ 1, 11, as income received from trustees not subject to taxation under said c. 62. The taxpayer duly applied by petition to the commissioner for an abatement of the additional tax so assessed. See G. L. (Ter. Ed.) c. 62, § 43, as amended. Abatement was denied and the taxpayer appealed to the Appellate Tax Board (see G. L. [Ter. Ed.] c. 62, § 45; see also c. 58A, §§ 6-13, as amended; St. 1937, c. 400), which decided that the taxpayer was not entitled to an abatement. The taxpayer appealed to this court.
There was no error of law in the decision of the Appellate Tax Board.
No question is raised with respect to the tax imposed by St. 1937, c. 422. The amount of this tax depends upon the amount of the tax for which the taxpayer was liable under other governing statutes, and need not be referred to again. Nor is any question raised as to the propriety of the tax assessed upon the sum of $8,817.92, reported by the taxpayer. The sole question presented relates to the tax
G. L. (Ter. Ed.) c. 62, § 1, as amended, imposes a tax of six per cent per annum upon income of certain described classes received by an inhabitant of the Commonwealth during the preceding calendar year. Section 5 (a) provides as follows: “Income from an annuity shall be taxed at the rate of one and one half per cent per annum. The income of property held in trust shall not be exempted from taxation under section one nor shall payments to beneficiaries be taxed under this section, because of the fact that the whole or any part of the payments to the beneficiaries is in the form of an annuity.” Section 11 provides as follows: “Any inhabitant of the commonwealth who receives income from one or more trustees or other fiduciaries who are not subject to taxation under this chapter, shall be subject to the taxes imposed by this chapter upon such income according to the nature of the income received by such trustees or other fiduciaries, and shall include such income in a return as required by section twenty-two.”
The sum of $18,000, the tax upon which is now in question, was received by the taxpayer from trustees residing in Pennsylvania under a provision of the will of her husband, late of Scranton, Pennsylvania, that “After providing for my mother and sister, as aforesaid, I direct that one-half Q/£) of the income from my estate shall be paid in quarterly instalments to my wife, Maude Staples, for and during the term of her natural life, for the support and maintenance of herself, and the support, maintenance and education of our minor children during their minority; and I further direct that the payments to my said wife shall not be less than the sum of eighteen thousand dollars ($18,000) per year for the period of ten (10) years after my death, and from and after the expiration of the said ten (10) years, that the payments to my wife shall not be less than the sum of ten thousand dollars ($10,000) per year. Should the income from my estate at any time be insufficient to provide the said sum of eighteen thousand dollars ($18,000) per year for the period of -ten (10) years after my death and the sum of ten thou
The sum of $18,000 in question, if it was income of any of the classes of income taxable under G. L. (Ter. Ed.) c. 62, § 1, clearly was income received by the taxpayer “from one or more trustees or other fiduciaries who are not subject to taxation under this chapter,” within the terms of G. L. (Ter. Ed.) c. 62, § 11. The taxpayer contends, however, that income so received by the taxpayer constituted an annuity within the meaning of G. L. (Ter. Ed.) c. 62, § 5 (a), and, consequently, was taxable only under the provisions of that section imposing a tax at the rate of one and one half per cent. But we need not consider whether this sum of $18,000 received by the taxpayer constituted an annuity. Even if it did it was none the less taxable under the provisions of G. L. (Ter. Ed.) c. 62, §§ 1, 11, by reason of the provision in said § 5 (a) that “The income of property held in trust shall not be exempted from taxation under section one nor shall payments to beneficiaries be taxed under this section, because of the fact that the whole or any part of the payments to the beneficiaries is in the form of an annuity.”
The conclusion above stated follows necessarily from the decision in the case of Tirrell v. Commissioner of Corporations & Taxation, 287 Mass. 464. The ground of that de
The taxpayer in the present case attempts to distinguish this case from the Tirrell case on the ground that, unlike the Tirrell case, the trustees 'had power under the will to
Cases arising under the income tax laws of the United States are not helpful in the determination of the question here presented because of the substantial differences between those statutes and the statutes here involved. See Burnet v. Whitehouse, 283 U. S. 148; Helvering v. Butterworth, 290 U. S. 365.
The taxpayer makes the further contention that, even if the sum of $18,000 received by her, so far as it was paid from “income of property held in trust,” was taxable under G. L. (Ter. Ed.) c. 62, §§ 1, 11, it does not appear that this sum was paid from such income. It was, however, assessed by the commissioner as so paid. And the Appellate Tax Board, though reciting that no “evidence was introduced as to the source of income received by the trustees, nor whether it is paid from the income or from the principal of the estate,” ruled in substance that the burden of proof on this issue was upon the taxpayer and concluded that the payments to the taxpayer “were made from income of property held in trust and were taxable at six per cent.” It is, at best, doubtful whether the question of burden of proof was “raised in the proceedings before the board” so
Petition for abatement dismissed.