Commissioner v. Duberstein and its companion case, Stanton v. United States, are two of my favorite cases to talk about in class. The Supreme Court turned aside the government's theory of what constitutes a tax-free gift for income tax purposes, leaving open the possibility that a gift can be made in a business setting, even by a corporation. Congress has since changed the rules quite a bit, essentially vindicating the government's theory, but Congress had to -- the High Court wasn't going to refine the statute.
It never occurred to me that there might have been a tape recorder going during the oral arguments in the Supreme Court in those days -- but as I just found out, there was. And if anyone wants to hear what was said, on one chilly, blustery Wednesday in March, 1960, it's here. My old tax professor in law school, Wayne G. Barnett, can be heard making the IRS's pitch in the Stanton case. As students of income tax history know, he lost.
The most colorful moments on the tapes come when Duberstein's lawyer is speaking. He really had everyone going, until he decided to skip a lot of his prepared remarks and simply read out loud what the Sixth Circuit had written. Not only was that a totally boring ending to his argument, but he lost his place and made everyone wait nearly a minute before he found it. He wound up losing, too.