United States et al. v. Hemme et al. (476 U.S. 558)
U.S. Supreme Court · decided June 3, 1986 · Supreme Court Database (Spaeth)
- Citation
- 476 U.S. 558 · 106 S. Ct. 2071
- Decided
- June 3, 1986
- Term
- October Term 1985
- Vote
- 9–0
- Majority author
- Justice Marshall
- Issue area
- Federal Taxation
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Liberal
Opinion excerpt
Justice Marshall delivered the opinion of the Court. Appellees, identified as the trustee of the “revocable living trust” of Charles W. Hirschi and transferees of Hirschi’s property, seek a refund of $6,000 in estate taxes, on the ground that the Government’s interpretation of a statutory transitional rule, enacted to bridge the old and new regimes for the federal taxation of gifts and estates, violates both the statute and the Constitution. I Prior to 1977, the gift tax and the estate tax were imposed, calculated, and collected separately. The gift tax, imposed on donors of certain gifts, permitted each taxpayer a lifetime exemption of $30,000 to be deducted from amounts otherwise taxable. 26 U. S. C. §2521 (1970 ed.). This so-called “specific exemption” could be claimed, in whole or in part, at any time during the taxpayer’s lifetime. Ibid. The estate tax, too, provided certain relief for modest estates. In determining the amount subject to estate tax, the estate was entitled to deduct a “specific exemption” of $60,000. §2052 (1970 ed.). In considering tax reform in 1976, Congress determined that several changes were necessary to ease the burden of estate and gift taxes on taxpayers of modest means. See H. R. Rep. No. 94-1380, p. 11 (1976). One such change was to transform what had been tax deductions into tax credits so that taxpayers in the lower brackets would benefit as…
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