The opinion of the court was delivered by: FORMAN
This is an action to recover the sum of $ 9,379.81 plus statutory interest thereon, representing an alleged overpayment in federal estate taxes assessed against and collected from plaintiff, as executor of the estate of a decedent dying on January 30, 1936. The parties hereto have filed a written stipulation of facts from which the court makes the following
1. The plaintiff, Morristown Trust Co., is the executor of the estate of Henry W. Williams, deceased, who died on January 30, 1936. (Stip., par. 1)
2. The plaintiff, as such executor, duly filed a federal estate tax return on December 29, 1936 (Stip., par. 2) and on April 19, 1937 paid the tax as indicated therein in the amount of $ 24,583.07 (Stip., par. 3).
3. The Commissioner of Internal Revenue thereafter tentatively audited and reviewed the said estate tax return and on September 13, 1939 tentatively determined a deficiency tax of $ 17,016 thereon, which sum together with interest of $ 2,806.47, a total of $ 19,822.17 was paid by plaintiff to the defendant Collector of Internal Revenue on May 1, 1940 (Stip., pars. 4 and 5).
4. In the said estate tax return the plaintiff failed to deduct and the Commissioner in his deficiency determination of September 13, 1939, made no allowance for deductions from the taxable assets of the said estate for the amount of executor's commission, attorneys' fees and administration expenses and for an 80% credit allowable on account of the New Jersey transfer inheritance taxes, because the amounts thereof were not determined or determinable at that time (Stip., par. 6).
6. The Commissioner, by letter dated February 17, 1944, allowed the deductions and credit claimed by the executor (Stip., par. 8).
7. The Commissioner of Internal Revenue in said letter of February 17, 1944, however, stated that the plaintiff's claim for refund would be disallowed on the ground that the amount of $ 199,450.91, his valuation of 33 (32, in fact) annuity contracts had been omitted from the plaintiff's above mentioned federal estate tax return and that upon a redetermination the above mentioned sum was includible in the gross estate, resulting in an underpayment of federal estate tax in the amount of $ 34,490.01, rather than an overpayment as claimed by plaintiff. (For the purpose of this litigation the parties agree that such figures for the valuation of the annuity contracts and for the amount of the alleged deficiency are correct (Stip., par. 9).)
8. The plaintiff's claim for refund was formally disallowed by the Commissioner of Internal Revenue by letter dated March 21, 1944 (Stip., par. 10). (At the pre-trial conference the parties agreed that at the time of the final determination of a tax deficiency by the Commissioner due to his inclusion in the gross estate of the annuity contracts, the assessment of such deficiency was barred by the applicable statute of limitations.)
9. The annuity contracts in question, 32 in number, were all purchased by the decedent during his lifetime and prior to March 3, 1931 from the following insurance companies: Travelers Insurance Company, Aetna Life Insurance Company, Prudential Insurance Company and Phoenix Mutual Life Insurance Company (Stip., pars. 11 and 12).
10. All such annuity contracts were of substantially the same type; single premium, survivorship annuity contracts providing for an annual annuity payment in a fixed amount to the decedent, Henry W. Williams, during his lifetime, and, upon his death, to his wife, Annie S. Williams, during her lifetime, if she should survive him, except that the Phoenix contracts provided for payments of the annuity, semi-annually (Stip. pars. 12, 13, 13A, 14, 14A, 15, 15A, 16 and 16A).
11. In correspondence with the attorney for the executor, all of the insurance companies issuing such annuity contracts quoted the premium which would have been charged if the annuity had been on the life of Henry W. Williams only, which in all cases was less than the single premium charged for the contract issued (Stip., Exhibits J, K, L, M and N).
12. Photostatic copies of all the annuity policies in question
were exhibited to the Commissioner when he was engaged in auditing the return prior to the expiration of the statutory period of limitation ...