Opinion
No. 72-058
Decided February 21, 1973. Rehearing denied April 17, 1973. Certiorari denied July 9, 1973.
Subsequent to filing supplemental inheritance tax application wherein he elected to be taxed upon the values of the estate property one year after decedent's date of death, executor sought to withdraw supplemental application and be assessed tax in accordance with the original application. From probate court ruling allowing supplemental application to be withdrawn, inheritance tax commissioner appealed.
Reversed
1. TAXATION — Inheritance Tax Application — Executor Filed — Optional Valuation — Bound Thereby — Result — Addition Back — 5% Discount. Executor, by filing a supplemental inheritance tax application, exercised his right under the applicable statutes to have the assets of decedent's estate valued one year after the date of death, and, although that valuation resulted in the addition back of 5% discount afforded the estate by virtue of its earlier payment made under the original application, the executor is bound by the assessment made on that optional valuation.
2. Election — Valuation — One Year — Date of Death — Final and Conclusive — Tax Commissioner — Not Permit — Withdrawal. By the specific language of the inheritance tax statute which allows executor to elect to have decedent's estate valued one year from date of death, once such election is properly made it becomes final and conclusive upon the estate and is also binding on the state tax commissioner such that the commissioner may not permit withdrawal of such valuation.
Appeal from the Probate Court of the City and County of Denver, Honorable David Brofman, Judge.
Duke W. Dunbar, Attorney General, Lon J. Putnam, Assistant, for petitioner-appellant.
Harry A. King, for respondent-appellee.
Division I.
This is an appeal from a judgment of the probate court reversing a determination of the Colorado inheritance tax commissioner. The facts are undisputed and are as follows:
The decedent, Harry Alton Burkhardt, died June 29, 1968. The executor of decedent's estate, in order to receive a statutory five percent discount on taxes due, made a payment on the state inheritance tax within six months after decedent's death. On September 29, 1969, approximately 13 months after death, the executor filed the original inheritance tax application and on the same day filed a supplemental application wherein he elected to be taxed upon the values of the property one year after date of death.
Initially the inheritance tax commissioner computed the tax on the values set forth in the original inheritance tax application and the five percent discount was allowed against the taxes due. Under this initial computation, additional taxes were due and were paid by the executor. Subsequently, a computation was made on the optional values set forth in the supplemental application. In this subsequent computation the five percent discount was not allowed but was added back into the tax liability. This assessment resulted in additional state inheritance taxes over and above the total that had previously been paid.
Upon receipt of the statement for additional taxes due, the executor notified the state inheritance tax commissioner that he desired to withdraw the optional supplemental application and wished to be bound by the assessment made on the original inheritance tax application. He contended that by virtue of an oversight, which he asserted was a mistake, either of fact or law, he was not aware that his election to proceed on the optional supplemental application would result in forfeiture of the five percent discount previously allowed. The commissioner denied the request for withdrawal, asserting that once the election was made it was conclusive upon the estate and that the law did not allow the withdrawal.
Reports of the appraisement and assessment of tax of the original and optional value supplemental applications were filed with the Probate Court in and for the City and County of Denver. The executor objected to the reports, asserting that his election to file the optional value supplemental application was due to an error of fact or law and that he was entitled to withdraw the supplemental application and have the tax assessed on the original application. The probate court sustained the objections and judgment was entered accordingly. We reverse the judgment.
Under the Colorado inheritance tax statutes, assessment of taxes is based on the value of the assets at the time of death, unless within 15 months after death an election is made by filing an optional value supplemental application to have the property assessed based on its value one year after the date of death. If payment of the tax is made within six months from the date of death, a five percent discount is allowed against the taxes due. 1965 Perm. Supp., C.R.S. 1963, 138-3-33, in pertinent part reads:
"All taxes imposed by this article which are paid within six months after they become due shall be allowed a discount of five percent. . . ."
However, if an election is made to have the tax assessed on the optional value of the property one year from the date of death the applicable provisions of C.R.S. 1963, 138-3-67, apply and are as follows:
"(1) The executor, administrator, or trustee of the estate of a decedent, or if there be no executor, administrator or trustee, then any person required to file a sworn statement under section 138-3-42, may elect to accept the provisions of this section by filing with the inheritance tax commissioner within fifteen months from the death of such decedent, or within such further period as the inheritance tax commissioner may fix by written extension, a supplement to the sworn statement required under section 138-3-42, setting forth the values applicable to each item of property included therein as valued under the provisions of this section.
. . . .
"(2)(d) Unless the supplemental sworn statement required in this section is received by the inheritance tax commissioner within the time prescribed in this section, said option shall not be allowed in the assessment of the tax provided for in this article; and if so received within the time prescribed in this section, the election to use said optional values shall be deemed to be final and conclusive upon the estate.
. . . .
"(4) In the event of such election there shall not be included in the property transferred any income accruing with respect to such property after the death of the decedent, but there shall be added to the tax liability the amount of discount actually taken under section 138-3-33." (Emphasis supplied.)
The executor of the estate contends that sections 138-3-33 and 138-3-67(4) are inconsistent and that the latter provision constitutes a penalty. The contentions are without merit.
It is presumed that the General Assembly had knowledge of the requirements of the provisions of 138-3-33 when it passed 138-3-67(4), and intended them to stand together. Smith v. Miller, 153 Colo. 35, 384 P.2d 738.
"In 'the interpretation of a statute, the legislature will be presumed to have inserted every part thereof for a purpose, and to have intended that every part of a statute should be carried into effect.'" McMillin v. Colorado, 158 Colo. 183, 405 P.2d 672.
It is evident from the statutory language that the General Assembly as a matter of grace simply intended to forgive a five percent portion of the taxes due if assessed on the value of the property at the time of death and paid within six months from date of death, and that if an election were made to proceed on the optional value one year from date of death the discount would not be applicable. The language of both statutes is explicit, clear, and unequivocal. The statutes therefore must be afforded their plain meaning. People ex rel. Marks v. District Court, 161 Colo. 14, 420 P.2d 236.
[1,2] In the instant case the executor, by filing a supplemental application, exercised his right to have the assets of the estate valued one year after the date of death, and therefore he is bound by the assessment made on the optional valuation which resulted in the addition back of the five percent discount. The specific language of C.R.S. 1963, 138-3-67(2)(a), which states that once the election is properly made it shall become final and conclusive upon the estate, is also binding on the state tax commissioner, and he is without authority to permit a withdrawal of the election once it is made. See Rosenfield v. U.S., 156 F. Supp. 780, affirmed, 254 F.2d 940.
Judgment reversed and cause remanded with instructions to the trial court to reinstate the assessment of the tax based upon the optional values as determined by the inheritance tax commissioner.
JUDGE ENOCH and JUDGE SMITH concur.