ESTATE OF COX

v.

UNITED STATES

469 U.S. 241, 105 S.Ct. 687, 83 L.E.2d 622 (1985) lays to rest the taxpayer’s contentions and with it his claim for refund. The facts are simple and not in dispute.

HISTORY OF THE CASE

The Plaintiff is the estate of Robert E. Cox, Atlantic National Bank, personal representative. The decedent, Robert Cox, died on March 9, 1978. Pursuant to the provision of 26 U.S.C. § 6075(a), a United States Estate Tax Return, Form 706, was due to be filed within nine months of the date of the decedent’s death, which was December 9, 1978.

On December 8, 1978, pursuant to Form 4768, Application for Extension of Time to File U.S. Estate Tax Return and/or Pay Estate Tax, Plaintiff requested an exten

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sion through June 6, 1979. The extension was approved by an official of the Internal Revenue Service on December 27, 1978.

On June 8th, a second Form 4768 was submitted to the Internal Revenue Service requesting a further extension of time to October 9, 1979. The application was received by the Internal Revenue Service on September 13, 1979, and was disapproved on September 26, 1979.

Finally, six months after it was due, the Estate Tax Return was filed on November 20, 1979. The Internal Revenue Service assessed a delinquency penalty against Plaintiff in the amount of $17,129.00, which the taxpayer paid on November 15, 1982. On April 18th, 1983, Plaintiff filed a Claim for Refund with the Internal Revenue Service for the amount of the penalty.

The issue presented in this case is the Plaintiffs liability for the delinquency penalty assessed pursuant to 26 U.S.C. § 6651(a)(2).

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Plaintiff asserts that it can demonstrate “reasonable cause” for the late filing of the return within the meaning of 26 U.S.C. § 6651(a)(1). It is the position of the United States that the taxpayer has failed to demonstrate reasonable cause.

The parties have filed cross motions for summary judgment agreeing that there are no material issues of fact and this case is ripe for summary judgment. Fed.R.Civ.P. 56. There is no dispute that the estate tax return was not timely filed pursuant to the requirements of Section 6075(a).

LEGAL DISCUSSION

The controlling law in this area is the recent pronouncement by a unanimous Supreme Court in

United States v. Boyle,

469 U.S. 241, 105 S.Ct. 687, 83 L.Ed.2d 622 (1985). The issue in

Boyle

was “... whether, under the statute, reliance on an attorney in the instant circumstance is a ‘reasonable cause’ for failure to meet the deadline.” 105 S.Ct. 692-693. The Supreme Court determined, in what can only be described as a strong policy statement, that reliance upon a third person to timely file required returns would not be considered reasonable cause. The Court articulated, “[t]he time has come for a rule with as ‘bright’ a line as can be drawn consistent with the statute and implementing regulations.”

Id.

at 692. In adopting this bright line test, the Court reasoned:

Congress has placed the burden of prompt filing on the executor, not on some agent or employee of the executor. The duty is fixed and clear; Congress intended to place upon the taxpayer an obligation to ascertain the statutory deadline and then meet that deadline, ... To say that it was “reasonable” for the executor to assume that the attorney would comply with the statute may resolve the matter as between them, but not with respect to the executor’s obligations under the statute. That the attorney, as the executor’s agent, was expected to attend to the matter does not relieve the principal of his duty to comply with the statute.

Id.

at 692-693.

It was the clear intent of the Court to adopt a strict filing standard which would foster prompt payment of taxes, eliminate an administrative nightmare and end the debate over reasonable cause in the so-called “reliance-type cases.”

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With

Boyle

as our polestar, we will now turn to a discussion of this case.

Plaintiff argues that the bright line is opague or, at least, sufficiently hazy to leave room for argument. The taxpayer contends that “[t]his cause is clearly distinguishable from

Boyle, supra,

and within the ‘erroneous advice’ exceptions set forth therein.” (Plaintiff's Motion for Summary Judgment, p. 4). While not a picture of

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clarity, Plaintiff’s contentions appear to be two-fold: (a) the personal representative, the bank officer assigned the case with Atlantic National Bank, frequently monitored the filing requirements by telephone calls and meetings with the certified public accountant and assurances were given that extensions were in place through October 9, 1979; and (b) the bank officer believed that the Estate would owe no estate taxes because of a charitable remainder bequest.

A dissection of these arguments reveals that each lacks merit. As to the first contention,

Boyle

makes clear that “[t]he failure to make a timely filing of a tax return is not excused by the taxpayer’s reliance on an agent, and such reliance is not ‘reasonable cause’ for a late filing under 6651(a)(1).”

United States v. Boyle,

105 S.Ct. 692-693.

The facts in

Boyle are

stronger from the taxpayer’s viewpoint than the present case.

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In

Boyle,

the executor was a businessman who had no experience in estate taxation other than having been the executor of his father’s will twenty-five years earlier. In the present case, the executor was a professional executor employed by a commercial bank hired for the express purpose of attending to the estate. A professional executor should be held to a stricter standard than a mere layman, albeit a businessman.

Here, the true essence of Plaintiff’s position is that it relied on a certified public accountant to obtain the extension and the agent failed to perform his responsibilities. That position is indistinguishable from

Boyle.

In addition, even if the Plaintiff believed that the filing was extended until October 9, 1979, this contention fails to address the additional delay until November 20, 1979.

Proceeding to the second contention, the Plaintiff amorphously asserts that it was under the mistaken belief that no estate taxes were due because of a charitable remainder bequest. While it is true that erroneous advise on a question of law can establish reasonable cause, that exception clearly has no application to the present case.

The issue is not whether the executor believed a tax was owed, but whether the executor knew that a return should be filed. 105 S.Ct. at 693. Whether or not any tax was due does not relieve the taxpayer from the requirement of the timely filing of a return.

Estate of Buring v. Commissioner,

Pursuant to 26 U.S.C. § 6018, effective 1978, an estate tax return was required to be filed if the gross estate exceeds $134,-000. In the present case, the gross estate was $428,452, and the bank, as a professional executor, was well aware of the filing requirement.

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CONCLUSION

In light of the bright line of

Boyle,

Plaintiff’s arguments must be rejected. Plaintiff has failed to meet its burden to demonstrate reasonable cause.

Welch v. Helvering,

290 U.S. 111, 54 S.Ct. 8, 78 L.Ed. 212 (1939). Eeliance upon an accountant does not excuse the professional executor. 6

The

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responsibility to timely file a tax return is non-delegable.

Alton OB-Gyn. Ltd. v. United States,

789 F. 2d 515 (7th Cir.1986). Moreover, an erroneous belief as to whether a tax is owed does not relieve the taxpayer from filing the return.

Accordingly, it is ORDERED and ADJUDGED as follows:

1. Plaintiff’s Motion for Summary Judgment is

denied.

2. Defendant’s Motion for Summary Judgment is

granted.

This cause is dismissed with prejudice. Final Judgment is entered for the United States.

3. The Court retains jurisdiction to consider any appropriate motions for costs.