Ernest L. Smith, Trustee of the E. L. Schmidt Trust v. United States

J. SPENCER BELL, Circuit Judge:

This is an action 1 for a refund of income taxes paid upon a deficiency assessment for the years 1953 and 1954. While a number of issues were litigated in the district court, the sole question on this appeal is whether the taxpayer-trustee is entitled to recover taxes paid by him on a deficiency erroneously assessed against the trust, with respect to income distributed to the life beneficiary. The district court held that the Government was entitled to retain the funds upon equitable principles. We cannot agree, and to this extent we reverse the judgment.

The…