Opinion · Supreme Court of the United States

United States Trust Co. v. Helvering

307 U.S. 57

Type
Opinion
Court
Supreme Court of the United States
Jurisdiction
Federal
Date
1939-04-17
Topic
general

How later courts describe this case

  • applying the rule of Greiner, Murdock, and Plummer to hold that property subject to a general exemption from “all taxation” would not exempt it from excise taxes such as the estate tax
  • relying on Murdock and Plummer to hold that an exemption for War Risk Insurance from “all taxation” did not exempt the insurance from federal estate tax
  • “[A]n estate tax is not levied upon the property of which an estate is composed. It is an excise imposed upon the transfer of or shifting in relationships to property at death.”
  • "An estate tax is not levied upon the property of which an estate is composed. It is an excise imposed upon the transfer of or shifting in relationships to property at death."
  • “Exemptions from taxation do not rest upon implication”

Citator

UpLaw has not yet analyzed United States Trust Co. v. Helvering. The absence of a flag is not a finding that it is good law.

Cited by
169 opinions

Headnotes

  1. Tax Law — Estate Tax A federal estate tax is not a tax upon the property composing an estate, but an excise imposed upon the transfer of property at death or the shifting of relationships to property at death; the tax is no less an estate tax because the proceeds are paid by the Government directly to a beneficiary, since the taxing power is exercised upon the transfer of property procured through the decedent's expenditures with the purpose, effected at his death, of having it pass to another. 307 U.S. at 60
  2. Tax Law — Statutory Tax Exemptions A statutory exemption of War Risk Insurance from "all taxation" reaches only the proceeds or benefits of the policy and exempts them from direct taxation; exemptions from taxation do not rest upon implication and will not be enlarged by implication to include immunity from excises upon the occasion of shifts of economic interests brought about by the death of an insured, so such proceeds remain subject to inclusion in the gross estate for purposes of the federal estate tax. 307 U.S. at 59–60
  3. Constitutional Law — Contracts Clause Inclusion of the proceeds of a War Risk Insurance policy in a decedent's gross estate for purposes of computing the federal estate tax does not impair any provision of the Government's contract with the insured veteran in violation of the Fifth Amendment, where neither the World War Veterans' Act nor the War Risk Insurance Act purported to exempt such insurance from death duties. 307 U.S. at 60
U.S. TRUST CO.v. HELVERING,307 U.S. 57(1939)
59 S.Ct. 692
UNITED STATES TRUST CO., EXECUTOR,v. HELVERING, COMMISSIONER OF INTERNAL
REVENUE.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT.
No. 453.
Argued March 3, 1939.
Decided April 17, 1939.
1. An estate tax is not a tax upon the property of which an estate is composed, but is an excise upon the transfer of or shifting in relationships to property at death. P. 60. 2. The proceeds of a War Risk Insurance policy payable to a deceased veteran's widow were properly included in his gross estate for the purpose of computing the federal estate tax. Revenue Act of 1926, § 302(g), as amended. P. 60. 3. Section 22 of the World War Veterans' Act, 1924, providing that such insurance "shall be exempt from all taxation," does not prevent. P. 59. 4. No provision of the Government's contract with an insured veteran is impaired in violation of the Fifth Amendment by the inclusion in his gross estate of proceeds of a War Risk Insurance policy for the purpose of computing the federal estate tax. P. 60.98 F.2d 734, affirmed.
CERTIORARI,305 U.S. 591, to review the affirmance of a
decision of the Board of Tax Appeals sustaining a determination
of a deficiency in federal estate tax.
Page 58
Mr. Wilder Goodwinfor petitioner.Mr. J. Louis Monarch, with whomSolicitor General Jackson,Assistant Attorney General Morris, andMessrs. Sewall KeyandEdward J. Ennis, andHelen R. Carlosswere on the brief, for respondent.
MR. JUSTICE BLACK delivered the opinion of the Court.
The sole question is whether proceeds of a War Risk Insurance policy payable to a deceased veteran's widow were properly included in his gross estate under a federal estate tax.

The federal estate tax in question1included in a decedent's gross estate the amount in excess of forty thousand dollars received by "beneficiaries [other than his estate] as insurance under policies taken out by the decedent upon his own life." This veteran's total life insurance for beneficiaries other than his estate exceeded at death the statutory exemption of forty thousand dollars, if his War Risk Insurance policy payable to his widow in the sum of ten thousand dollars is included. The Commissioner assessed an estate tax measured by this excess. As decedent's executor, petitioner claimed that proceeds of the War Risk Insurance policy could not be included in the estate because of § 22 of the World War Veterans' Act, 1924, providing that such "insurance . . . shall be exempt from all taxation."2The Board of Tax Appeals upheld the determination of the Commissioner, and the Circuit Court of Appeals affirmed.3Page 59

Congress has manifested a consistent policy in the Revenue Acts from 1918 to 1934, when the veteran died, by impositions of estate taxes upon transfers at death of proceeds of all life insurance (not payable to an insured's estate) in excess of forty thousand dollars. This has been in harmony with a general plan of graduating income and inheritance taxes to accord with the respective sizes of incomes and estates.4And the Treasury Regulations have stated that "The statute provides for the inclusion in the gross estate of . . . All insurance [not for the benefit of an estate] . . . to the extent that it exceeds . . . forty thousand dollars . . . The term `insurance' refers to life insurance of every description, . . ."5

But petitioner invokes the provision of the World War Veterans' Act, 1924, that insurance thereunder "shall be exempt from all taxation." An amendment to that Act of August 12, 19356provides that "Payments of benefits due or to become due . . . shall be exempt from taxation . . ." However, this amendment served only to clarify the original provision for exemption, without more.7Unless resort is had to enlargement by implication, this exemption means only that the proceeds or benefits of a War Risk policy are exempt from taxation.Page 60Exemptions from taxation do not rest upon implication.8

An estate tax is not levied upon the property of which an estate is composed. It is an excise imposed upon the transfer of or shifting in relationships to property at death.9The tax here is no less an estate tax because the proceeds of the policy were paid by the Government directly to the beneficiary; the taxing power was nevertheless exercised upon "the transfer of property procured through expenditures by the decedent with the purpose, effected at his death, of having it pass to another."10In an analogous situation, federal bonds exempt by statute from all taxation have been held subject to a federal inheritance tax.11And state inheritance taxes can be measured by the value of federal bonds exempted by statute from state taxation in any form.12Similarly, the statutory immunity of War Risk Insurance from taxation does not include an immunity from excises upon the occasion of shifts of economic interests brought about by the death of an insured.

Petitioner makes the further point that the inclusion of proceeds of the War Risk policy for purposes of an estate tax amounts to an impairment of the Government's contract with the insured veteran, in violation of the Fifth Amendment to the Constitution. But neither the Act of 1924, as amended, nor any of the provisions of the War Risk Insurance Act purported to exempt War Risk Insurance from death duties. Therefore, no statutoryPage 61exemption which could be considered a provision of the insurance contract has been affected by the imposition of the estate tax in this case. The judgment isAffirmed.
  1. Page 58 § 302(g) Revenue Act of 1926, as amended. ↩
  2. Page 5843 Stat. 607, 613. ↩
  3. Page 5898 F.2d 734. State courts have differed as to whether proceeds of War Risk Insurance are subject to death duties imposed by the States. See, for example,In re Estate of Harris,179 Minn. 450;229 N.W. 781;Tax Commissionv.Rife,179 Ohio St. 83; 162 N.E. Page 59 390;Wanzel's Estate,295 Pa. 419;145 A. 512;Watkinsv.Hall,107 W. Va. 202;147 S.E. 876(holding these proceeds not subject to such excises); andMatter of Sabin,224 A.D. 702;228 N.Y.S. 890;Matter of Dean,131 Misc. 125;225 N.Y.S. 543(contra). In view of this fact and the importance of an authoritative interpretation of the federal statutes involved, we granted certiorari,305 U.S. 591. ↩
  4. Page 59 See,44 Stat. 9, 21, 22;48 Stat. 680, 684, 754. ↩
  5. Page 59 Treasury Regulation No. 70 (1929 Edition), Articles 25 and 27; Treasury Regulation No. 80, (1934 Edition), Articles 25 and 27. ↩
  6. Page 5949 Stat. 607, 609. ↩
  7. Page 59Lawrencev.Shaw,300 U.S. 245,249. ↩
  8. Page 60Rapid Transit Corp. v.New York,303 U.S. 573,592,593;Trotterv.Tennessee,290 U.S. 354,356,357;J.W. PerryCo. v.Norfolk,220 U.S. 472,480;Chicago TheologicalSeminaryv.Illinois,188 U.S. 662,672. ↩
  9. Page 60Reineckev.Northern Trust Co.,278 U.S. 339,347;ChaseNational Bankv.United States,278 U.S. 327,334;UnitedStatesv.Jacobs,306 U.S. 363,367. ↩
  10. Page 60Chase National Bankv.United States, supra, 337. ↩
  11. Page 60Murdockv.Ward,178 U.S. 139. ↩
  12. Page 60Plummerv.Coler,178 U.S. 115. ↩