Kaplan v. United States

GÓURLEY, Chief Judge.

This is an action for refund of income taxes in the amount of $70,000 for the year 1943, alleged to have been erroneously collected from plaintiffs’ decedent.

The following questions are raised:

1. Whether a taxpayer reporting on the cash basis, who borrows money from a third person to pay his creditor a deductible debt, must take his deduction in the year the creditor was paid or in later years when the third party is paid.

2. Whether the doctrine of collateral estoppel precludes a judgment for taxpayers on their second cause of action by reason of judgment by the Tax Court…