United States v. Byrum

408 U.S. 125 (1972)

From our private database of 46,400+ case briefs, written and edited by humans—never with AI.

United States v. Byrum

United States Supreme Court
408 U.S. 125 (1972)

Facts

Milliken Byrum owned a controlling share of three corporations. Each corporation also had a substantial number of minority shareholders unrelated to Byrum. Byrum formed an irrevocable trust for the benefit of his children, with their children as successors, and transferred a portion of his shares in the three corporations to the trust. The trust agreement required appointment of a corporate trustee, which Byrum appointed. Although the trustee had broad discretionary powers, Byrum retained the right, under the trust agreement, to vote the transferred shares. Consequently, even though Byrum owned less than 50 percent of the shares of each of the three corporations after the transfer, he still held voting control over the corporation. This retained power meant that Byrum could select each corporation’s board of directors. Under state law, the board of directors of any of the three corporations held the power to retain corporate earnings or, alternatively, to distribute them as dividends, a portion of which the trust would receive as income. Byrum died while the trust was still in existence. The Internal Revenue Service (IRS) (defendant) determined that the shares Byrum had transferred to the trust were includable in Byrum’s gross estate. The IRS’s argument was that, because the corporations’ directors controlled whether the corporations issued dividends and because Byrum controlled the election of those directors, Byrum retained adequate control over the flow of income to the trust to require the shares’ inclusion. The executor of Byrum’s estate (plaintiff) paid the additional taxes and sued for a refund in district court. The district court found in favor of the executor, and the court of appeals affirmed. The government appealed to the United States Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Powell, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 832,000 law students since 2011. Some law schools even subscribe directly to Quimbee for all their law students.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

Here's why 832,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,400 briefs, keyed to 994 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 832,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,400 briefs - keyed to 994 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership