Brown v. United States

Ellen Brown and Earl Brown, Sr., a husband and wife, passed away in 1968 and 1969, respectively. Estates were opened for each, and Earl Brown, Jr. (Earl Jr.) (plaintiff) was the principal beneficiary and executor of both estates. By 1982, Earl Jr. had not closed either estate. Ultimately, the government (defendant) determined that the income earned by the estates should have been reported on Earl Jr.’s income tax for at least the last five years. Termination of an estate was construed by statute as the period actually required to complete the administration of the estate, but a treasury regulation noted that the period could not be unduly prolonged. If the period of administration was unduly prolonged, then the estate would be considered terminated after sufficient time for performance of the duties of administration by the executor. Earl Jr. argued that he was still undertaking administrative duties—including payments of life legacies to beneficiaries—and that the Texas probate court had entered an order that give Earl Jr. sole discretion over when to terminate the estate. The government did not agree, noting that all documents necessary to terminate had been approved by the probate court and that inheritance and estate taxes had been filed, all assets had been located, and debts, claims, and expenses had been paid. Earl Jr. paid the taxes claimed by the government, then filed suit for refund. The trial court granted the government summary judgment, and Earl Jr. appealed.