Mahaffey v. Helvering

WOODROUGH, Circuit Judge

(dissenting).

I am in accord with the decision of the Tax Court and therefore dissent. The common run of taxpayers must, and do, more or less cheerfully, pay tax in respect *883to the part of their income that they devote to providing for aged parents. I find no lack of “expert care” in this taxpayer’s ingenious attempt to provide Fifteen Hundred Dollars a year for his aged mother out of income from his preferred stock and to exempt himself from tax in respect to it. It involved very much expertness. But I think the Tax Court properly appraised the true purpose and intention of the taxpayer, disclosed in his acts and the wording of his document of January 17, 1934, and his subsequent transactions. That he intended to, and acted and worded his document so that he could and did, retain full dominion and control of his stock, seems to me to be fairly deducible from the acts and wording and to be confirmed by the fact that he did subsequently make a sale of the stock as corpus for some $60,000 without any reference to, or recognition of, any alleged interest of his mother.

The one tangible, undebatable fact in this case is that the taxpayer keeps his stock and his papers about it himself. Outside of that, the Tax Court and this Court have both drawn able reasonings from the same law books. But we mistake to call the conclusions “inescapable.” Though it has been said that in cases of doubt as to liability for tax the courts may resolve such doubt for the taxpayer, the courts cannot apply such a doctrine to the solution of tax problems created with artifice for the purpose of escaping taxes. They can not so commit the institution to the affirmative aid of the artificers, or say to them: “You make the matter doubtful and the courts will do the rest.” The government exists by taxation.