Monday, April 29, 2013

Cesarini v. United States case brief

Cesarini v. United States case brief
296 F. Supp. 3, 1969 U.S. Dist. 69-1 U.S. Tax Cas. (CCH) P9270; 23 A.F.T.R.2d (RIA) 997

CASE SYNOPSIS: Plaintiff taxpayers filed an action for the recovery of income tax payments made plus interest on an amount of money they found inside a piano they owned; in the alternative, plaintiffs requested the money be treated as capital gains.

FACTS: Plaintiffs filed an action against defendant federal government, contending that taxes paid on money they found inside of a piano was erroneous and they were entitled to a refund of that money, along with interest.

ANALYSIS:
The court found plaintiffs were unable to point to any inconsistency between the gross income sections of the Internal Revenue Code, 26 U.S.C.S. § 61(a), the interpretation of them by the regulations and the courts, and the revenue ruling they attacked as inapplicable, Treas. Reg. § 1.61-14. On the other hand, defendant showed a consistency in letter and spirit between the ruling and the code, regulations, and court decisions. Since the statutes and rules clearly included treasure trove in calculations of gross income, plaintiffs were not entitled to a refund. Moreover, plaintiffs did not sell or exchange either the piano or the money, so no capital gains could be realized on either the money or the piano.

CONCLUSION: The court denied the refund and found plaintiffs were not entitled to capital gains treatment on the income item at issue.

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