U.S. Supreme Court BLAIR V. COMMISSIONER OF INTERNAL REVENUE , 300 U.S. 5 (1937)

300 U.S. 5

BLAIRv. COMMISSIONER OF INTERNAL REVENUE.No. 247.

Argued Jan. 5, 1937.Decided Feb. 1, 1937.

[ Blair v. Commissioner of Internal Revenue 300 U.S. 5 (1937) ]

[Page 300 U.S. 5 , 12]

694. See, also, Burnet v. Wells, 289 U.S. 670, 677, 763. There is here no question of evasion or of giving effect to statutory provisions designed to forestall evasion; or of the taxpayer's retention of control. Corliss v. Bowers, ; Burnet v. Guggenheim, 288 U.S. 280.

In the instant case, the tax is upon income as to which, in the general application of the revenue acts, the tax liability attaches to ownership. See Poe v. Seaborn, supra; Hoeper v. Tax Commission, 284 U.S. 206.

The Government points to the provisions of the revenue acts imposing upon the beneficiary of a trust the liability for the tax upon the income distributable to the beneficiary. [Footnote 1] But the term is merely descriptive of the one entitled to the beneficial interest. These provisions cannot be taken to preclude valid assignments of the beneficial interest, or to affect the duty of the trustee to distribute income to the owner of the beneficial interest, whether he was such initially or becomes such by valid assignment. The one who is to receive the income as the owner of the beneficial interest is to pay the tax. If under the law governing the trust the beneficial interest is assignable, and if it has been assigned without reservation, the assignee thus becomes the beneficiary and is entitled to rights and remedies accordingly. We find nothing in the revenue acts which denies him that status.

[Page 300 U.S. 5 , 14]

estate in and to property.' Brown v. Fletcher, supra; Senior v. Braden, supra. See Bogert, Trusts and Trustees, vol. 1, 183, pp. 516, 517; 17 Columbia Law Review, 269, 273, 289, 290.

We conclude that the assignments were valid, that the assignees thereby became the owners of the specified beneficial interests in the income, and that as to these interests they and not the petitioner were taxable for the tax years in question. The judgment of the Circuit Court of Appeals is reversed and the cause is remanded with direction to affirm the decision of the Board of Tax Appeals.

It is so ordered. Footnotes

Footnote 1 Revenue Acts of 1921, 219(a)(d), 42 Stat. 246; 1924 and 1926, 219(a) (b), 43 Stat. 275, 44 Stat. 32; 1928, 162(a)(b), 26 U.S.C.A. 162(a, b) and note.