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Keywords

contractappeal

Related Cases

Keller v. Commissioner of Internal Revenue, 312 U.S. 543, 61 S.Ct. 651, 85 L.Ed. 1032, 41-1 USTC P 10,030, 25 A.F.T.R. 1186, 1941-1 C.B. 433

Facts

The case centers on an annuity contract that provided for annual payments of $390.84, costing the decedent $3,258.20, and an insurance policy that stipulated a payment of $20,000 to the decedent's daughter upon her death, with a single premium of $17,941.80. The decedent was 74 years old when the contract was executed and died about two years later. The Commissioner assessed a deficiency in the federal estate tax, which the Board of Tax Appeals reversed, but the Circuit Court of Appeals subsequently reversed the Board's decision.

Here the annuity contract provided for annual payments of $390.84 and cost decedent $3,258.20. The ‘insurance’ policy stipulated for payment of $20,000 to decedent's daughter at decedent's death, and the single premium was $17,941.80.

Issue

Whether the distinctions between this case and Helvering v. Le Gierse are sufficient to require a different result regarding the existence of an insurance risk.

Rule

The court applied the principle that the existence of an insurance risk must be clearly established and cannot be inferred from the mere assumption of some risk by the insurance company.

It is not enough to show that the insurance company assumed ‘some’ risk.

Analysis

The court analyzed the facts in light of the established rule, concluding that the distinctions made by the petitioners were insufficient. The court emphasized that the insurance company's later adjustments to the total charge for the contracts did not indicate the presence of an insurance risk, but rather highlighted the interrelation of the agreements and the company's efforts to mitigate investment risk. The absence of a physical examination was also deemed inconclusive regarding the existence of an insurance risk.

We find the distinctions insufficient to require a different result.

Conclusion

The Supreme Court affirmed the judgment of the Circuit Court of Appeals, agreeing that the case was not distinguishable from Helvering v. Le Gierse.

Since the case is not distinguishable from Helvering v. Le Gierse, supra, the judgment of the Circuit Court of Appeals is affirmed.

Who won?

The Commissioner of Internal Revenue prevailed in the case as the Supreme Court affirmed the Circuit Court's decision, which reversed the Board of Tax Appeals.

The Circuit Court of Appeals in turn reversed the Board of Tax Appeals.

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Keywords

Related Cases

Veterinary Surgical Consultants, P.C. v. C.I.R., 539 U.S. 943, 123 S.Ct. 2621 (Mem), 156 L.Ed.2d 630, 71 USLW 3725, 71 USLW 3788, 71 USLW 3789

Nu-Look Design, Inc. v. C.I.R., 356 F.3d 290, 93 A.F.T.R.2d 2004-608, 2004-1 USTC P 50,138, Unempl.Ins.Rep. (CCH) P 17,147

Higgins v. Smith, 308 U.S. 473, 60 S.Ct. 355, 84 L.Ed. 406, 40-1 USTC P 9160, 23 A.F.T.R. 800, 1940-1 C.B. 127

Ledoux v. Commissioner of Internal Revenue, 77 T.C. 293

Groetzinger v. Commissioner of Internal Revenue, 69 T.C. 309