Before SWAN, AUGUSTUS N. HAND, and FRANK, Circuit Judges.
AUGUSTUS N. HAND, Circuit Judge.
This is an appeal from the Tax Court of the United States which imposed a tax of $104,864.73 upon Evelyn N. Moore, a transferee of her husband Edward S. Moore, for a deficiency to that amount in gift taxes due from him in the year 1935.
During the year 1935 Edward S. Moore made taxable gifts of securities to the petitioner Evelyn Moore of the value of $410,500. On March 11, 1936 he filed a gift tax return with the Collector and paid the amount of the tax therein shown to be due.Although the donor has always been financially able to satisfy any deficiency in gift taxes for 1935 the Commissioner never made an assessment against him with respect to his liability for gift taxes for that year but assessed the taxes against his transferee, in spite of the fact that the three year statutory period for determining any deficiency against him had expired on March 11, 1939. On February 20, 1940 the Commissioner sent a notice to the petitioner of her alleged liability as a transferee of the property of her husband. In determining her tax deficiency he made no change in the gifts of the donor in 1935, but found the 1935 gifts subject to higher rates of tax because there were increases in gifts over those he had reported for prior years, and assessed the deficiency of $104,864.73 accordingly. This assessment by the Commissioner was sustained by the Tax Court. We think that its decision was required by the terms of the Revenue Act and should be affirmed.
The petition for review by the taxpayer raises three questions:
1. Whether the assessment against heris barred by the statute of limitation.
2. Whether she ever became personally liable for any gift tax.
3. Whether if any gift tax was due the amount of her tax should be applied to reduce the value of the gift to her.
Section 510 of the Revenue Act of 1932, 26 U.S.C.A. Int. Rev. Code, § 1009, provided as follows:
"The tax imposed by this title shall be a lien upon all gifts made during the calendar year, for ten years from the time the gifts are made. If the tax is not paid when due, the donee of any gift shall be personally liable for such tax to the extent of the value of such gift. * * *"
Section 517, 26 U.S.C.A. Int. Rev. Code, § 1016, fixes the period of limitation upon assessment and collection in 517(a) thus:
"(a) General rule. Except as provided in sub-section (b), the amount of taxes imposed by this title shall be assessed within three years after the return was filed, and no proceeding in court without assessment for the collection of such taxes shall be ...