
    REFUND OF INHERITANCE TAX.
    Common Pleas Court of Clinton County.
    In the Matter of the Estate of Evaline Atley. G. P. Thorpe, Admr., v. Tax Commission of Ohio.
    Decided January, 1927.
    
      Inheritance Taxation — Right to Refund Under Section 5339, G. C.— Failure to Except to Appraisement Under Section 53U6 G. C., Constitutes a Bar.
    
    1. The right to a refund, after inheritance taxes have been paid, is fixed by Section 5339 of the General Code and applies only debts that have been proven against the estate after the taxes have been paid.
    2. The difference between the appraised value of real estate upon which the tax has been paid, and the amount received for such real estate at public sale more than a year thereafter, is not a debt, and no refunder can be allowed on that account.
    3. Where real estate has been appraised for the purpose of assessing the inheritance tax, any person objecting to such appraisement must except within sixty days thereafter, as provided by Section 5346 of the General Code, or be bound by the result thereof.
    
      4.- One failing to except to such appraisement cannot, after the property has been sold for less than the appraisement, seek a refunder under the provisions of Section 5339, based upon such difference.
    
      C. Luther Swaim, for G. P. Thorpe, Administrator of the Estate of Evaline Atley, deceased.
    
      W. H. Middleton, Jr., for the Tax Commission of Ohio.
   Clevenger, J.

Proceeding to determine refund of inheritance tax.

This matter comes to this court on appeal from the probate court, and involves the question of refunder of inheritance taxes based upon the discovery of debts unknown at the time of the assessment and payment of the taxes, and upon the further ground of an over valuation of certain real estate. The right to make the application for a refund is given by Section 5339, of the code. This section permits an order of refunder where it has been ascertained that “debts” have been proven against the estate after the determination of the inheritance taxes. By the same section, where it appears that improper deductions have been made, or additional assets discovered, the court may correct such errors and assess an additional tax.

The administrator, in his application, predicates his right to a refund upon three grounds, viz. (a) over-valuation of a certain farm to the extent of $6,485.51, and (b) error in the estimated costs of administration to the extent of $188.13, and (c) the establishment of additional debts of the estate to the extent of $10,570.81, or a total of $17,244.48.

Objection is made by the Tax Commission to any refund based upon over-valuation of the tract of real estate in question. The evidence on that item shows that the land was valued at $26,787, on May 1, 1923, and at a public sale of same August 25, 1924, it brought the sum of $20,536.70. Certain charges against the estate in favor of the tenant, to the amount of $235.21, were allowed by the court, reducing said sale value to $20,301.49. The administrator claims a refund of taxes based upon the difference between the appraised value, to-wit, $26,787, and the net sale value, to-wit, $20,301.49.

The right to a refund falls entirely within the provisions of said Section 5339 of the code. The court thinks the difference between an appraised value of real estate and what it actually sells for more than a year thereafter can hardly be classified as a “debt.” Moreover, it is doubtful if value can be fixed in that way. The law provides for an appraisal of an estate in order to ascertain its value for assessing the inheritance. Any one dissatisfied with the appraisal has a right to file exceptions thereto within sixty days. No exceptions were filed in this case. It seems that all were satisfied with the appraisement until more than a year thereafter, when the land brought less than its appraised value. The court thinks that if an interested party desires to object to an appraisement, it must be done as provided by Section 5346 of the Code, which is by way of exceptions. Therefore, the holding will be that no refund can be based on the difference between the appraised and sale value of said farm.

The items allowed the tenant, to-wit, $235.21, the court thinks fall within the classification of debts and will be allowed. Likewise, where the cost of administration is under-estimated, the court thinks the difference would be a debt. Therefore, the order will be, that a refund be allowed as follows:

Nelia Atley note $3,120.81

Clinton County National Bank note 7,450.00

Costs 188.13

Allowances to tenant 235.21

Total $10,994.15

The costs of this proceeding to be paid by the administrator.  