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GUTTMANN v. UNITED STATES

February 24, 1960

Monroe GUTTMANN and Loretta Guttmann
v.
UNITED STATES of America. Monroe GUTTMANN, Elizabeth Wolfers and Alexander Guttmann, Trustees of Trust for Rose Guttmann, et al., and Elizabeth Wolfers, Monroe Guttmann and Alexander Guttmann, Trustees of Trust for Elizabeth Wolfers et al. v. UNITED STATES of America



The opinion of the court was delivered by: GOURLEY

1. a. Plaintiffs at Civil Action No. 17037, Monroe Guttmann and Loretta Guttmann, his wife, residents of Allegheny County, Pennsylvania, filed a joint income tax return for the year 1955, with the District Director of Internal Revenue at Pittsburgh, Pennsylvania, on April 12, 1956, reporting a tax liability of $ 19,724.69, and paid that amount.

b. In computing their taxable income, they deducted the sum of $ 12,645, being their cost of settling certain litigation, hereinafter called the Pittsburgh Terminal litigation, in which they were named as respondents.

 c. The deduction of $ 12,645 was disallowed by the District Director, and, pursuant to such disallowance, an additional tax of $ 7,585.63, with interest, was assessed against plaintiffs.

 d. Plaintiffs, on January 17, 1958, paid to the District Director of Internal Revenue at Pittsburgh, Pennsylvania, the sum of $ 7,887.19 in payment of such deficiency of $ 7,585.63, plus interest thereon in the sum of $ 301.56 to the date of payment.

 e. Plaintiffs, on March 7, 1958, filed with the District Director a claim for refund of $ 7,887.19 plus interest from the date of payment. A true copy of the claim for refund is attached as an exhibit to the complaint.

 f. On June 24, 1958, the District Director disallowed the claim for refund and no part of said sum of $ 7,887.19, plus interest from the date of payment, has been refunded to plaintiffs.

 g. The present suit for refund by plaintiffs at Civil Action No. 17037 was filed on June 2, 1958.

 h. Plaintiffs also deducted in their 1955 return the sum of $ 606.30 for legal and travel expense paid in connection with their defense of the Pittsburgh Terminal litigation.

 i. The foregoing deduction of $ 606.30 was disallowed by the Internal Revenue Service and as a result thereof an additional assessment of $ 357.71 in tax and $ 65.97 in interest, totalling $ 423.68, was made against plaintiffs on May 12, 1959, which assessment has not been paid. A counterclaim for the additional assessment of $ 423.68 was duly authorized and filed in the present suit by defendant.

 (Oral stipulation of counsel)

 2. a. Plaintiffs at Civil Action No. 17318, trustees of trusts for Rose Guttmann et al. and for Elizabeth Wolfers et al. filed their 1955 fiduciary income tax returns with the District Director of Internal Revenue at Pittsburgh, Pennsylvania on April 18, 1956, reporting tax liabilities of $ 356.55 and $ 363.84, respectively, and paid those amounts.

 b. In computing their taxable incomes, plaintiff trusts each deducted the sum of $ 6,772.50, being their cost of settling the Pittsburgh Terminal litigation, in which they were also named as respondents.

 c. The deductions of $ 6,772.50 were disallowed by the District Director, and, pursuant to such disallowances, an additional tax of $ 1,792.24 with interest was assessed against the Rose Guttmann trust, and an additional tax of $ 1.797.34 with interest was assessed against the Elizabeth Wolfers trust.

 d. On January 17, 1958, the Rose Guttmann trust paid to the District Director of Internal Revenue at Pittsburgh, Pennsylvania, the sum of $ 1,978.24 in payment of such deficiency of $ 1,792.24, plus interest thereon in the sum of $ 186 to the date of payment, and the Elizabeth Wolfers trust paid $ 1,983.87 in payment of such deficiency ...


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