This matter came on for non-jury trial on a complaint filed by the plaintiffs in which they sought the return of $13,620.47 plus interest which is alleged to be an overpayment of estate taxes by the Estate of Lewis L. Silberman.
The parties have stipulated and I find that the plaintiffs in this action are James C. Silberman and Alan L. Silberman, Executors of the Estate of Lewis L. Silberman, deceased; that the defendant is the United States of America; that on August 24, 1964, the plaintiffs filed a Federal Estate Tax Return, Form 706, showing a gross estate of $425,018.99, a taxable estate of $108,733.30 and an estate tax due and owing of $22,620.26, which amount was paid with the return; that on August 14, 1967, the plaintiffs filed with the District Director of Internal Revenue, Pittsburgh, Pennsylvania, a claim for refund, Form 843, requesting a refund of $13,620.47, plus interest, on the grounds that the amount included in the decedent's gross estate under Schedule I, Annuities, of the Federal Estate Tax Return was improperly included in the gross estate; that the plaintiffs' claim for refund was rejected by certified mail on May 9, 1968; that pursuant to 28 U.S.C. § 1346(a)(1) the complaint in this action was filed on November 26, 1968; that the decedent was employed by the Henry Wilkens Company, prior to 1945; that the Wilkens Company, successor to Henry Wilkens Company was incorporated on June 28, 1945; that from July 14, 1945 until the date of his death, May 25, 1963, the decedent was President, Treasurer and General Manager of the Wilkens Company; that on July 2, 1955, the decedent entered into an agreement with the Wilkens Company (the 1955 Agreement); that the Board of Directors of the Wilkens Company authorized the agreement at the annual meeting of the Board of Directors of the Company held on July 1, 1955; that on June 5, 1959 the decedent entered into an amended employment agreement with the Wilkens Company (the 1959 Agreement) which was ratified by the Board of Directors at a special meeting on June 5, 1959; that the decedent owned 98 percent of the outstanding shares of common stock of the Wilkens Company since 1945 and his wife, Dorothy P. Silberman owned the remaining two percent; that from the date of the 1955 Agreement and continuously until the date of his death in 1963, the decedent fulfilled his obligations under the agreement on a full-time basis; that Lewis L. Silberman died testate on May 25, 1963 and that he was survived by his wife, Dorothy P. Silberman, and two sons, James C. Silberman and Alan L. Silberman, the executors here, as plaintiffs.
Prior to his death Mr. Silberman entered into an employment agreement with the Wilkens Company. It is the provisions of that agreement, as amended, which now become the focus of this dispute.