UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 02-60075
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ESTATE OF ALGERINE ALLEN SMITH, Deceased,
JAMES ALLEN SMITH, Executor
Petitioners-Appellants,
versus
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
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Appeal from a Decision of the
United States Tax Court
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November 7, 2002
Before JONES, SMITH, and SILER,* Circuit Judges.
PER CURIAM:*
After carefully considering the appellant’s position in
light of the briefs, pertinent portions of the record, and oral
arguments, we affirm the judgment of the Tax Court.
*
Circuit Judge of the 6TH Circuit, sitting by designation.
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
At the time of her death, Algerine Allen Smith (decedent)
was one of multiple defendants in a lawsuit brought by Exxon
Corporation to recoup excessive royalty payments. The decedent’s
estate claimed a deduction on its federal estate tax return under
26 U.S.C. § 2053(a)(3) in the amount of $2,482,719, the entire
amount sought by Exxon from the decedent. In 1997, the Tax Court
held that the deduction for Exxon’s claim was limited to $681,840,
the amount eventually paid in settlement of the claim. Estate of
Smith v. Comm’r, 108 T.C. 412, 425 (1997). On appeal, a panel of
this Court concluded that the estate was not entitled to deduct the
full amount claimed by Exxon, Estate of Smith v. Comm’r, 198 F.3d
515, 521 (5th Cir. 1999) (Smith I), and remanded the case to the Tax
Court with instructions to appraise the value of Exxon’s claim
based on information known or available as of the date of the
decedent’s death. Id. at 517-18. On remand, the Commissioner
presented the testimony of an expert witness that the value of
Exxon’s claim at the time of the decedent’s death was not more than
$681,840. The Estate did not present any evidence of the value of
Exxon’s claim but, instead, simply argued that it was entitled to
deduct the full amount demanded by Exxon. The Tax Court limited
the amount of the estate’s deduction to $681,840.
The appellants challenge the Tax Court’s limitation of
the estate’s deduction, the admission of the expert witness’s
testimony, and the denial of its motion to place the burden of
proof on the Commissioner. We cannot square the appellants’ claim
for a deduction in the amount of $2,482,719 with this Court’s
holding in Smith I. The Tax Court complied with the mandate of
this Court in valuing Exxon’s claim and did not abuse its
discretion in admitting the testimony of the Commissioner’s expert
witness. The expert witness’s testimony satisfies the requirements
of Federal Rule of Evidence 702 and is precisely the type of
evidence that this Court instructed the Tax Court to consider. We
also conclude that the Tax Court did not err by placing the burden
of proof on the estate regarding the claimed deduction. Sealy
Power, Ltd. v. Comm’r, 46 F.3d 382, 387 (5th Cir. 1995).
For the foregoing reasons, the judgment of the Tax Court
is affirmed.
AFFIRMED.