claim for attorneys' fees incurred in prosecuting such refund
claim. At the time a refund claim is filed, no such attorneys'
fees will have been incurred, and, if the Commissioner denies the
grounds upon which the claim is based, the claim for deduction of
attorneys' fees would be denied as a matter of course. If the
Commissioner allows the grounds upon which the refund claim is
based, it is clear that no attorneys' fees would have to be
incurred in prosecuting it. The reason behind the requirement of
filing a claim for refund is to "apprise the Commissioner of the
exact basis thereof" so that he might investigate the pertinent
underlying facts and ascertain the applicable law in either
granting or rejecting the claim. Clearly a claim for attorneys'
fees need not be set forth in a claim for refund where they are
not the essence of the claim but may arise only collaterally in
the subsequent prosecution of the claim. Therefore, since this
Court had jurisdiction to determine whether the proceeds of
certain life insurance policies should be included in the
decedent's taxable estate, then it follows that it also has
jurisdiction to grant a deduction for attorneys' fees incurred as
a consequence of successfully achieving such a determination.
The authorities cited by the defendant in support of his
contentions in each case can easily be distinguished from the
In Real Estate Title Co. v. United States, 309 U.S. 13, 60
S.Ct. 371, 84 L. Ed. 542, the Supreme Court held that, absent a
waiver by the government, or a proper amendment, a petitioner
could not, upon bringing suit, urge grounds to support a recovery
which were completely different from the grounds set forth in his
refund claim. United States v. Felt and Tarrant Co.,
283 U.S. 269, 51 S.Ct. 376, 75 L.Ed. 1025, is also similarly
The Court of Appeals for the Seventh Circuit, in United States
v. Chicago Golf Club, 84 F.2d 914, 916, merely held that the
requirements "(1) that a claim for refund must be presented to
the Commissioner of Internal Revenue within four years next after
the payment of such tax [and] (2) that suit must be begun within
two years after the disallowance of the claim" are substantive
jurisdictional requirements. This ruling is not in conflict with
my views expressed in this memorandum.
In Grandeur Building Inc., v. Jarecki, D.C., 92 F. Supp. 867, I
held that where no claim for refund was filed this Court would
lack jurisdiction to hear the matter. This holding does not
support the defendant in the instant case.
Van Dyke v. Kuhl, 7 Cir., 171 F.2d 187, is a case where a
claimant, after successfully prosecuting a refund claim, filed
suit for a deduction for attorneys' fees incurred in bringing the
prior suit. The court was concerned with the question of whether
the refund judgment must include the allowance for attorneys'
fees and expenses incurred in the prosecution of the case as res
judicata to any further claim. After the refund judgment referred
to in the Van Dyke Case, Section 81.34 of Regulation 105 has been
amended so as to do away with this res judicata problem, as this
section provides that a deduction for attorneys' fees can be
claimed at the time the refund claim is prosecuted. I retained
jurisdiction of the original judgment herein in order to avoid
any res judicata problem concerning the deduction of attorneys'
fees incurred on the appeal. Therefore, Van Dyke v. Kuhl, supra,
is no authority for the proposition that a claim for attorneys'
fees incurred in an estate tax suit must be included in the claim
for refund which forms the basis for the suit.
With reference to the further theories submitted by counsel for
the plaintiff, any consideration of these arguments becomes
unnecessary in view of the foregoing.
For the reasons heretofore stated, the motion for relief from
judgment is denied and the petition for supplemental judgment is
granted, and judgment will enter in accordance with the views
in this memorandum. The defendant is ordered to submit any
objections he may have to the accuracy of plaintiff's
recomputation of the tax payable on the decedent's estate,
attached to the petition, within 30 days hereof. If such
objections are not submitted, judgment for $2,248.45, together
with interest, will enter on the motion of the plaintiff at any
regular motion's call of this court.
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