Erroneous Collection of Inheritance Tax

October 13, 1958 BIR RULING NO. 674-58 2nd Indorsement Referred to the Revenue Operations Executive (Assessment), B.I.R., the papers bearing on the estate of the late Clyde A. Dewitt, an American citizen and a resident of the State of New York at the time of his death on November 3, 1956. It appears that the tax law of the State of New York does not impose any inheritance (transfer) tax on the transmission of estates of persons, residents or non-residents, dying on or after September 1, 1930. (See: Mckinney's Consolidated Laws of New York annotated, Book 59, Part 2, p. 3 (Historical Note); Ibid., pp. 168-169 (Historical Note). Neither does said law impose an estate tax on the intangible personal property of a non-resident decedent. (See: Ibid., p. 226 (Historical Note). However, the Federal Government of the United States levies and collects the estate tax under Section 860 of the U.S. Federal Estate Tax Law. (See: Collector vs. James E. Norton et al., G. R. No. L-10432, May 28, 1958). Applying the reciprocity provisions of Section 122(a) of our Tax Code, and pursuant to the doctrine laid down by our Supreme Court in the Norton case, no inheritance tax is due from the heirs and beneficiaries of the late Clyde A. Dewitt, it appearing that the estate left by the deceased in the Philippines consisted of intangible personal property. The estate is, however, subject to the estate tax. The records of this case show that the amounts of P92,022.41 and P88,706.62 had already been paid as estate and inheritance taxes, respectively. Said taxes, however, were based on the returned Philippine gross estate of P912,669.53, which was reappraised at P1,027,573.67; so that, therefore, the difference of P114,904.14 was not subjected to the estate tax. Accordingly, the deficiency estate tax should be assessed. It appearing that the amount of P88,706.62 was erroneously collected as inheritance tax and is, therefore, refundable to the estate, the same may be applied to the payment of whatever deficiency estate tax may be found to be due from the estate and whatever balance remains after such payment should be refunded to the executor of the estate or his authorized representative. cdti (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue