During 1947 through 1950 inclusive, Charles A. Ries (herein 'Charles') and Joseph E. Ries (herein 'Joseph') were equal partners in a business engaged in buying, reconditioning and selling barrels. Charles and Joseph filed individual income tax returns for 1947, and joint returns with their wives for 1948, 1949 and 1950. Plaintiffs are Joseph, his wife, and the executor and administrator of the estates of Charles and his wife, respectively, the latter two persons having died in 1956 and 1953. Charles, Joseph and their wives are referred to as the taxpayers.
The income tax deficiencies resulted from alleged understatements of distributable income of the partnership. As a result of Government audit the distributable partnership income reported by the taxpayers was increased by $ 17,190.57 for 1947, $ 22,103.61 for 1948, and $ 28,249.82 for 1950, and was decreased by $ 3,728.20 for 1949. Principally because of these changes, the following income tax deficiencies were assessed:
1947 1948 1950
Charles and wife $1,387.10 $2,908.32
Joseph and wife $1,259.38 $2,897.30