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Cesarini v. United States - 428 F.2d 812 (6th Cir. 1970)

Rule:

The statute of limitations did not foreclose assessment of the tax merely because the money was not found until 1964, seven years after the piano had been purchased.

Facts:

In 1957, the Cesarinis purchased a used piano at an auction sale for approximately $15.00, and the piano was used by their daughter for piano lessons. In 1964, while cleaning the piano, plaintiffs discovered the sum of $4,467.00 in old currency, and since have retained the piano instead of discarding it as previously planned. Being unable to ascertain who put the money there, the Cesarinis exchanged the old currency for new at a bank, and reported the sum of $4,467.00 on their 1964 joint income tax return as ordinary income from other sources. On October 18, 1965, the Cesarinis filed an amended return with the District Director of Internal Revenue in Cleveland, Ohio, this second return eliminating the sum of $4,467.00 from the gross income computation, and requesting a refund in the amount of $836.51, the amount allegedly overpaid as a result of the former inclusion of $4,467.00 in the original return for the calendar year of 1964. On January 18, 1966, the Commissioner of Internal Revenue rejected taxpayers' refund claim in its entirety, and the Cesarinis filed the instant action in March of 1967. The district court denied the Cesarinis’ claim for the recovery of income tax paid in the year 1964. The district court found that the Cesarinis were not entitled to a refund for taxes paid on money found in a second-hand piano. The district court held that the statute of limitations did not foreclose assessment of the tax merely because the money was not found until 1964, seven years after the piano had been purchased. The Cesarinis sought appellate review.

Issue:

Did the district court err in holding that the statute of limitations did not foreclose assessment of the tax merely because the money was not found until 1964, seven years after the piano had been purchased?

Answer:

No

Conclusion:

The Court of Appeals for the Sixth Circuit affirmed, adopting the opinion and legal analysis of the district court. Specifically, the district court had rejected the Cesarinis’ claims that money found by them in a second-hand piano that they had purchased in the year 1957 was not taxable income. The Cesarinis had not found the money until 1964 and reported the sum on their 1964 joint income tax return as ordinary income from other sources. In 1965, the Cesarinis filed an amended return requesting a refund for the taxes paid because the statute of limitations foreclosed the assessment of tax. The district court rejected their argument and denied the Cesarinis’ claims.

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