Commissioner of Internal Revenue v. Estate of Bosch

PETITIONER: Commissioner of Internal Revenue
RESPONDENT: Estate of Bosch
LOCATION: U.S. District Court for the Southern District of California, Central Division

DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 387 US 456 (1967)
ARGUED: Mar 22, 1967
DECIDED: Jun 05, 1967

Facts of the case


Media for Commissioner of Internal Revenue v. Estate of Bosch

Audio Transcription for Oral Argument - March 22, 1967 in Commissioner of Internal Revenue v. Estate of Bosch

Earl Warren:

The Second National Bank of New Haven, Petitioner, versus the United States.

Mr. Thompson.

Curtiss K. Thompson:

Mr. Chief Justice, if the Court pleases.

This suit for the recovery of federal estate taxes depends on the final analysis upon how much property the widow of the decedent receives under a residuary bequest.

The petition for certiorari presented two questions for review.

First, whether the Court of Appeals' decision holding that estate taxes should not be apportioned between the widow and the grandchildren, who were the other residuary legatees, was in conflict with the law of the State of Connecticut.

And the second question is whether or not the decree of the probate court which decided the matter differently than the Court of Appeals did was binding in conclusive upon the Internal Revenue Service.

Mr. Brewster, when he made his will gave one-third of the residue to his widow in trust, and two-thirds to nine grandchildren each in a separate trust.

His will contained a tax clause which Your Honors will find printed on page 12 of the record, it was Article I of the will, and which is a little long to read.

The -- it's noteworthy that these two residuary bequests to the widow and the grandchildren, when the will was made, were equally taxable.

Therefore, it made no difference whether the testator directed that these estate taxes should be apportioned between the residuary bequests or whether he directed differently.

The estate would have been distributed in the same manner.

But Mr. Brewster made a codicil to his will.

And when he did that, he ordered the bequest to the widow, which as I said was in trust, so that it qualified for the marital deduction and became tax exempt.

Now, as soon as that change was made, it became important to both the widow and to the grandchildren as to whether or not the estate taxes were to be apportioned or prorated between them because the widow's gift at that point was tax exempt.

Now, if you had a proration between those two gifts, the widow would bear no part of the estate taxes under residuary bequests, or under residual properties.

If there was no proration, she would thus the tax clause which was written when this -- when it gets briefly taxable.

And when the testator did not have this problem in mind and did not speak to it, the question becomes whether that tax clause or what the effect of this act to the codicil he had written.

Potter Stewart:

He certainly had the general problem in mind when he wrote the codicil.

Curtiss K. Thompson:

When he wrote codicil --

Potter Stewart:

Because the codicil was obviously for the purpose of giving the residuary bequest to the widow, the benefit of the marital deduction generally, wasn't it?

Curtiss K. Thompson:


Yes, he wanted to make the gift to the widow tax exempt.

Potter Stewart:

That was the --

Curtiss K. Thompson:

That was the purpose of the codicil, yes.

Potter Stewart:

By giving her general power?

Curtiss K. Thompson:


Potter Stewart:

For its right.

Curtiss K. Thompson:

That's right.

Now, I think I ought to make it clear just exactly what taxes we're talking about here.