Lykes v. United States (343 U.S. 118)
U.S. Supreme Court · decided March 24, 1952 · Supreme Court Database (Spaeth)
- Citation
- 343 U.S. 118 · 72 S. Ct. 585
- Decided
- March 24, 1952
- Term
- October Term 1951
- Vote
- 6–3
- Majority author
- Justice Burton
- Issue area
- Federal Taxation
- Disposition
- Affirmed
- Outcome
- Petitioning party lost
- Ideological direction
- Liberal
Opinion excerpt
Mr. Justice Burton delivered the opinion of the Court. The question here is whether, for federal income tax purposes, an individual taxpayer was entitled to deduct, from his gross income, an attorney’s fee paid for contesting the amount of his federal gift tax. For the reasons hereafter stated we hold that he was not. In 1940, Joseph T. Lykes, petitioner herein, gave to his wife and to each of his three children, respectively, 250 shares of common stock in Lykes Brothers, Inc., a closely held family corporation. In his federal gift tax return he valued the shares at $120 each and, on that basis, paid a tax of $13,032.75. In 1944, the Commissioner of Internal Revenue revalued the shares at $915.50 each and notified petitioner of a gift tax deficiency of $145,276.50. Through his attorney, petitioner sought a redetermination of the deficiency, forestalled an assessment, and, in 1946, paid $15,612.75 in settlement of the deficiency pursuant to a finding of the Tax Court based on stipulated facts. In 1944, petitioner had paid his attorney $7,263.83 for legal services in the gift tax controversy but, in his federal income tax return, had not deducted that expenditure from his taxable income. In 1946, he claimed a tax refund on the ground that the attorney’s fee should have been deducted under § 23 (a) (2) of the Internal Revenue Code. His claim was denied by the Commissioner and…
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