1 Reporter's Statement of the Case of the estate of the decedent herein, including estate tax matters. As such Superintendent, he is the representative of the Secretary of the Interior, who, by law, is the trustee of the property of restricted Indians of the Five Civilized Tribes. 2. Decedent, who died on June 5, 1940, a citizen of the United States and a resident of Henryetta, Oklahoma, was a full-blood Creek Indian, being enrolled opposite Creek Roll No. 4564. 3. October 3, 1941, plaintiff filed an estate tax return for decedent's estate which disclosed a Federal estate tax liability of $7,005.57. In arriving at said tax liability, there was included in the gross estate $1,424 representing the value of 160 acres of land allotted to decedent, plus $4,500 representing his oil and gas royalty interest therein, totaling $5,924; $3,158 representing the value of 80 acres of purchased land and $2,500 representing the value of a purchased house and lot, totaling $5,658; United States Treasury bonds of a value of $104,937.50 and accrued interest thereon of $638.89, totaling $105,576.39; cash of $7,172.46 and accrued interest thereon. of $25.49, totaling $7,197.95; Travel Bureau checks in the amount of $250; and other miscellaneous property consisting of livestock and farm equipment in the amount of $315. 4. Said estate tax of $7,005.57, plus interest thereon of $13.76, totaling $7,019.33, was paid to the collector of internal revenue for the District of Oklahoma on November 24, 1941. 5. February 18, 1942, D. S. Bliss, Deputy Commissioner of Internal Revenue, advised plaintiff that an examination of the estate tax return and other data on file pertaining to decedent's estate disclosed no deficiency in the Federal estate tax. 6. November 15, 1944, plaintiff filed a claim for refund in the amount of $7,019.33. The claim for refund reads in part as follows: Deponent claims (1) that the decedent was a restricted Creek Indian, (2) that by virtue of sundry acts of Congress, more particularly the acts of May 27, 1908 (35 Stat. 312); May 10, 1928 (45 Stat. 495) and January 27, 1933 (47 Stat. 777), all of the restricted property, real and personal in which the deceased had Reporter's Statement of the Case 109 C. Cls. any interest at the time of his death was held in trust or under the supervision of the United States; that upon his death all of such property continued to be held in trust or under the supervision of the United States for the benefit of his heirs or devisees, and that during the period of trust or supervision all such property is immune from taxation under the Federal revenue laws, (3) that decedent's restricted real estate, United States Treasury bonds purchased with restricted funds and deposited in the Treasury of the United States for safekeeping, restricted funds on deposit with the Treasurer of the United States to his credit on the books of the Five Tribes Agency, and personal property including automobile, household goods purchased on restricted form of bill of sale form no part of the gross estate within the meaning and purpose of the Federal revenue acts. 7. April 21, 1945, the Commissioner of Internal Revenue issued a Certificate of Overassessment allowing a refund of Federal estate taxes in the amount of $172.15 on account of credit for inheritance or estate tax paid to the State of Oklahoma. The refund of $172.15 was arrived at by allowing the full credit claimed for inheritance or estate tax of $3,593.19. Due to said credit for inheritance or estate tax, the net tax liability of decedent's estate was reduced to $6,847.18. The Certificate of Overassessment allowing the refund reads in part as follows: The estate's contentions as set forth in clauses 2 and 3 of the claim have been considered. However, it does not appear that the issues raised in the instant case differ materially from those in the case of Jeanetta Burgess, nee Tiger, Deceased Creek, Roll No. 5069 v. Commissioner, decided by the United States Board of Tax Appeals (now The Tax Court of the United States) on October 15, 1940, 42 B. T. A. 958, affirmed by the Circuit Court of Appeals for the Tenth Circuit, on November 11, 1941, certiorari denied, 123 Fed. (2d) 787. Accordingly, to the extent not herein allowed, the claim for refund is rejected. 1 Reporter's Statement of the Case 8. June 4, 1945, the Commissioner of Internal Revenue advised plaintiff by letter of that date of the disallowance of plaintiff's claim for refund in the amount of $7,019.33 to the extent not previously allowed. 9. Decedent at the time of his death was possessed of the following properties: (a) One hundred sixty (160) acres of land in Okfuskee County, Oklahoma, which had been allotted to him under the provisions of the Act of Congress of March 1, 1901 (31 Stat. 861), as amended by the Act of Congress of June 30, 1902 (32 Stat. 500), ratified by the Creek Nation on May 25, 1901, which said lands are described as East Half (E2) of the Northeast Quarter (NE), and the Southwest Quarter (SW) of the Northeast Quarter (NE14) of Section 24, Township 11 North, Range 11 East, containing 120 acres, the same being decedent's surplus lands, and Northwest Quarter (NW14) of the Northeast Quarter (NE) of Section 24, Township 11 North, Range 11 East, containing 40 acres, the same being decedent's homestead. (b) House and lot in Henryetta, Oklahoma, purchased for $8,500.00 on January 9, 1924, out of restricted funds of decedent, described as Lot 1, Block 28, Keys 2nd Edition to Henryetta, Oklahoma; (c) United States Treasury bonds of a value of $104,937.50 purchased with restricted funds and deposited with the Treasury of the United States for safekeeping and accrued interest thereon of $638.89; (d) Cash of $7,172.46 deposited with the Treasurer of the United States to the credit of the decedent on the books of the Five Tribes Agency and accrued interest thereon of $25.49; (e) Travel Bureau checks of a value of $250.00; (f) Other miscellaneous property consisting of livestock and farm equipment. Said cash and United States Treasury bonds were fully restricted and could not be used, pledged or disposed of without the approval of the Secretary of the Interior. 10. All of said allotted lands at the time of decedent's death were fully restricted and could not be sold, leased or other Reporter's Statement of the Case 109 C. Cls. wise encumbered, without approval of the Secretary of the Interior, under the Act of Congress of April 26, 1906 (34 Stat. 137), ratified and approved by the Creek Tribe on October 2 and 3, 1907, and by the President of the United States on September 17, 1907, the Act of May 27, 1908 (35 Stat. 312), and the Act of May 10, 1928 (45 Stat. 495). The certificate of exemption from taxation of said allotted lands, issued under the provisions of the Act of Congress of May 10, 1928 (45 Stat. 495), reads as follows: Okmulgee, Okla., June 3rd, 1929. Pursuant to Section 4 of the Act of Congress of May 10, 1928 (Public No. 360, 70th Congress), the following described restricted Indian lands belonging to Punskee Field, Henryetta, Oklahoma, a full blood citizen of the Creek Nation, Roll No. 4564, are hereby selected and designated as tax exempt as long as the title thereto remains in the said Punskee Field, or in any full-blood Indian heir or devisee of said lands; such tax exemption, in no event, however, to extend beyond April 26, 1956. 1 Reporter's Statement of the Case Washington, D. C. Jan. 14, 1930. Approved: Jos. M. DIXON, First Assistant Secretary. To be signed by the Indian, or by the Superintendent if the Indian is a minor, incompetent adult, or where the Indian fails to designate. 8WL-17 5-670 Filed for record on the 25th day of June 1931, at 9 o'clock A. M., and recorded in Book 19, page 254. 11. The house and lot in Henryetta, Oklahoma, at the time of decedent's death were fully restricted and could not be sold, leased or otherwise encumbered without approval of the Secretary of the Interior. 12. January 24, 1919, an oil and gas mining lease was entered into by decedent, covering all of said 160 acres of land allotted to decedent, as aforesaid, which said lease was approved by the Secretary of the Interior on March 25, 1919. Production was first had under said lease in 1922, the lease is still producing in paying quantities, and the royalties therefrom, under the provisions of the lease, are paid to the Superintendent of the Five Civilized Tribes. 13. From the date of original production in 1922 under said oil and gas mining lease on decedent's allotment to June 5, 1940, the date of decedent's death, there were paid into the Five Tribes Agency for decedent's account oil and gas royalties in the total sum of $590,204.60, of which amount $566,339.11 accrued from the date of original production to April 26, 1931, and $23,865.49 from April 27, 1931 to June 5, 1940. During this period there was also credited to decedent's account interest in the total sum of $128,170.19, of which $83,010.56 accrued prior to April 26, 1931, and $45,159.63 from April 27, 1931 to June 5, 1940; rentals in the total sum of $1,660 and income from lease cancellation |