WILLIAM G. CALLOW, J.
This is a review of a decision
The issue presented on appeal is whether an estate is entitled to a court hearing, pursuant to sec. 72.30(4), Stats., on an inheritance tax redetermination made more than six months after a tax certificate was issued by the department of revenue in compliance with sec. 72.30 (3) (c).
James E. Halsted died intestate on March 6, 1978, and his estate was probated in the Sauk county circuit court before Judge James W. Karch. On June 15, 1978, Lydia Carmen Pavia filed claims against the estate for $184,328 and for the entire contents of Halsted's house located in Baraboo, Wisconsin. These claims were disputed by the representatives of the Halsted estate. The estate filed a federal estate tax return on November 15, 1978, and a state inheritance tax return on February 20, 1979, but it did not include as a debt of the estate the disputed Pavia claims. On March 9, 1979, the Wisconsin Department of Revenue (Department) issued a certificate, pursuant to sec. 72.30 (3) (c), Stats.,
In March of 1981 the estate received from the United States Internal Revenue Service a federal estate tax-refund of $67,309.74 to account for the depletion of the estate in payment of the Pavia debt. On April 10, 1981, the estate filed a second amended return, reflecting the federal tax refund and the adjustments set forth in the first amended return, and claimed a tax refund of
In response to the Department's redetermination of the tax liability, the estate on May 29, 1981, filed a petition, pursuant to sec. 72.30(4), Stats., with the court requesting a hearing on the estate's claimed tax refund and the Department's redetermination of the tax due. The Department responded to the petition by arguing that the petition was barred by the six-month limit imposed by sec. 72.30(4). In a decision and order entered December 30, 1981, the court denied the estate's motion to strike the Department's defense, deciding that the petition was barred because it was not timely filed under sec. 72.30(4). On January 12, 1982, the court entered an order dismissing the estate's petition and requiring the estate to pay the $21,145.71 assessed by the Department for additional inheritance taxes and interest due on the second amended return. The estate appealed from both the December 30, 1981, and the January 12, 1982, orders.
The court of appeals, in a split decision, affirmed the circuit court's orders. The court found that sec. 72.30 (4), Stats., unambiguously barred the right to petition the court for a hearing on a disputed tax matter after six months had elapsed from the filing of a sec. 72.30(3) (c) tax certificate. The court relied on our interpretation of the predecessor statute to sec. 72.30(4), sec. 72.15 (11),
The dissenting opinion disagreed with the majority's interpretation of sec. 72.30(4), Stats. The dissent concluded the majority's narrow construction of the section's language ignored the realities of estate tax determinations and defeated the legislative intent to provide estates court hearings on tax disputes. The dissent began by noting that estates often have to make adjustments as additional liabilities or assets are discovered during the process of closing the estate. When such
In interpreting statutes we apply the oft-repeated guiding principles that "[t]he aim of all statutory construction is to discern the intent of the legislature," Green Bay Packaging, Inc. v. ILHR Dept., 72 Wis.2d 26, 35, 240 N.W.2d 422 (1976), and that a "cardinal rule in interpreting statutes" is to favor a construction which will fulfill the purpose of the statute over a construction which defeats the manifest object of the act. Student Asso., University of Wisconsin-Milwaukee v. Baum, 74 Wis.2d 283, 294-95, 246 N.W.2d 622 (1976). Where one of several interpretations of a statute is possible, the court must ascertain the legislative intention from the language of the statute in relation to its context, subject matter, scope, history, and object intended to be accomplished. State ex rel. First National Bank & Trust Co. of Racine v. Skow, 91 Wis.2d 773, 779, 284 N.W.2d 74 (1979).
We conclude that the primary purpose of sec. 72.30(4), Stats., is to provide estates an opportunity to appeal to a circuit court any disputed inheritance tax determinations made by the department of revenue. Sec. 72.30(4) provides, in part, that "any person dissatisfied with the appraisal, assessment or determination of the tax due under this subchapter may apply for a hearing before the circuit court." Further, the legislative council notes accompanying the enactment of this section provided in pertinent part: "This new administrative procedure removes
We presume that the legislature was aware that this tax determination process necessarily implies that there may be estate matters still pending even though a return was filed and a tax certificate issued. Nothing in Chapter 72 prohibits the filing of amended returns or the making of tax redeterminations to cover adjustments in the value of an estate;
We also note that in this case the estate could not have petitioned the court for a hearing within the six-month period after the March 9, 1979, tax certificate was issued because no dispute had yet arisen. The original tax certificate merely restated the amount the estate had calculated it owed on its first return; thus, there was no disputed tax issue at that time. Even though the estate may have been aware that adjustments would have to be made, it had no live dispute upon which to base its petition because it did not know whether the Department would accept or reject the claimed adjustments. Further, under the Department's position, assuming the estate had filed an amended return and sought a departmental tax redetermination within the six-month period, its right to a court hearing would be denied if the redetermination was issued after the six-month period ended. Therefore, to interpret sec. 72.30(4), Stats., as a bar to future disputes would cut off the estate's right to a hearing even before that right could be exercised.
We caution, however, that the court hearing should be limited to consideration only of new matters raised by the filing of an amended return.
The dispute which gives rise to a right to a court hearing cannot ripen until the Department makes a tax determination. In this case the six-month period was triggered by the dispute which arose when the Department on April 30, 1981, notified the estate that the claimed deductions were disallowed
By the Court.—The decision of the court of appeals is reversed, and cause remanded for proceedings consistent with this opinion.
SHIRLEY S. ABRAHAMSON, J. (dissenting).
I find the reasoning of the majority opinion of the court of appeals persuasive, and I would affirm the decision of the court of appeals. In the Matter of Estate of Halsted, 111 Wis.2d 606, 331 N.W.2d 609 (Ct. App. 1983).
We are not persuaded by the legislative committee meeting notes cited by the Department in support of its contention that the legislature intended sec. 72.30(4) to operate in the same manner as sec. 72.15(11). These notes indicate the six-month limitation was a concern of the legislators, but they do not change our conclusion that permitting court hearings on tax redeterminations would be commensurate with the legislature's primary objective in enacting this provision. We conclude, therefore, that our cases interpreting sec. 72.15(11) are inapposite to our construction of sec. 72.30(4).
"No valuation or other substantive issue upon which the department has issued its certificate may be reopened more than 6 months after the date of the certificate except with the mutual consent of the department and taxpayer."
Thus a recomputation of state inheritance tax based upon a federal estate tax change occurring more than six months after the tax certificate is issued may not change the valuation of the estate or any other substantive issue unless the Department and the taxpayer consent. Because of our interpretation of sec. 72.30 (4), we conclude that a new six-month period under this section also is triggered when a new certificate is issued on an amended tax return. We caution, however, that the Department may make changes in valuation or other substantive issues only as to those new tax matters raised in the amended return upon which the new certificate is issued.