Plaintiff, Eden Hall Farm, sued the government for the recovery of federal income taxes that were paid for the taxable years 1960 through 1967, inclusive, in the amount of $114,100.37 together with interest paid thereon in the amount of $30,230.61, plus statutory interest as provided by law.
Non-jury trial of the case was held. A stipulation of facts and a supplemental stipulation of facts, each with accompanying exhibits, were admitted in evidence at trial. Oral testimony was received. After trial, briefs were submitted.
Management and control of Eden Hall was vested in a board of three trustees, all of whom were required to be employees of the H. J. Heinz Company during their term as trustees. Mueller, who was executive vice-president of the H. J. Heinz Company, had worked for the company in Pittsburgh since 1884. All trustees have been employees of the Heinz Company.
The land bequeathed to Eden Hall consisted of approximately 450 acres and included Mueller's summer home as well as 200 acres of land used for farming and orchards, and 250 acres of hilly woodlands. During each of the years in suit (1960 through 1967), there were guest facilities which included a lodge building with sleeping quarters for 38 guests, a dining room, sitting-TV room, administrative offices, a recreation room with bowling alleys and pool table, and a large building for indoor roller skating. Prior to 1966, sleeping quarters for two guests were included in Mueller's summer home. Because of fire regulations, these facilities were not used after 1965. The outdoor facilities included a swimming pool, tennis court, riding stable (where eight riding horses were kept), a bridle path, nature trails through the wooded areas, and a picnic grove.
Lodge expenses for the years in issue were as follows:
1960 $ 98,694