Before HASTINGS, Chief Judge, and MAJOR and KNOCH, Circuit Judges.
Petitioner, Abraham Teitelbaum, seeks review of decision by the Tax Court which reversed in part and affirmed in part determinations made by the Commissioner of Internal Revenue, respondent herein.
On behalf of himself and his partner, (his first wife, Esther Melnick Teitelbaum) the petitioner paid a jeopardy assessment in excess of $340,000 including taxes, interest, penalties and costs, for the years 1944 through 1948. In 1955, there was another jeopardy assessment against petitioner for the years 1949 through 1951. Mr. Teitelbaum's petitions for re-determination of both assessments were consolidated for trial.
Mr. Teitelbaum lists the contested issues as follows:
1. The trial Court Judge Russell E. Train should have in good conscience informed Petitioner at the start of the hearings of the consolidated petitions for tax redetermination, that he was the minority member of the King Congressional Committee in 1951 investigation of Income Tax Irregularities in which proceeding Petitioner was a main witness, who thought it was his civic duty to give testimony in which he was an intended victim of a $500,000 extortion plot.
Had Judge Train, at the start of the proceedings, made a statement as to his being a member of the minority group of the King Congressional Committee, or an attorney on the Staff of the Joint Committee on Internal Revenue taxation, then his statement having been made, it would have been up to Petitioner either to exercise his Constitutional prerogative to ask or not to ask for a change of venue. Tr. pp. 1387, 1430.
On pages 192-193 of the Tr., Petitioner called to the Court's attention his participation as a witness before the King Congressional Committee. This remark was made in Petitioner's opening statement to the trial Judge. Tr. p. 148.
2. The majority of the rulings of the trial Judge were erroneous in law and not based on the evidence.
3. The rulings of the trial Judge in favor of Petitioner did not result in the return of any money paid under protest, because of his ruling in the second tax case.
4. The burden of proof of fraud, being on Respondent, the same was not discharged.
5. The trial Judge failed to honor the stipulations of facts filed in the cases. Tr. pp. 127 to 145 Incl.
From the record it appears that Judge Russell E. Train, who heard this case in the Tax Court, was an attorney on the staff of the Joint Committee on Internal Revenue Taxation and never a member of the staff of the King Subcommittee. Judge Train was a merespectator to Mr. Teitelbaum's testimony as a witness before the King Subcommittee, and took no position adverse to Mr. Teitelbaum. Mr. Teitelbaum, himself, stated in the Tax Court hearing:
"I am perfectly satisfied with your Honor. I certainly wouldn't have asked for a change of venue * * *." [Tr. 1398]
The record affords no support for any finding of disqualifying personal bias or prejudice. Tucker v. Kerner, 7 Cir., 1950, 186 F.2d 79, 23 A.L.R.2d 1027.
While Mr. Teitelbaum was counsel for the Chicago Restaurant Association, he received certain sums which he characterized as Christmas bonus gifts and which he did not report as taxable income. Whether these sums were gifts exempt from tax or were taxable compensation presents a question of fact. If the payments proceeded primarily from the constraint of a moral or legal duty, they were not gifts. Bogardus v. Commissioner, 1937, 302 U.S. 34, 41, 58 S. Ct. 61, 82 L. Ed. 32. The minutes of the Chicago Restaurant Association disclose the motive for these payments. The minutes indicate:
"* * * at this time of the year we usually consider the matter of a Christmas Gift to Mr. Teitelbaum to cover additional ...