Havard v. Commissioner , 19 B.T.A. 1270 ( 1930 )

CHARLES HAVARD, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Havard v. Commissioner

Docket No. 32841.

United States Board of Tax Appeals

19 B.T.A. 1270; 1930 BTA LEXIS 2231;

May 29, 1930, Promulgated

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TRANSFEREES - LIMITATION UPON TIME OF ASSESSMENT. - The evidence shows that the notice of liability as a transferee was mailed to the petitioner by the respondent within the statutory period of one year following the expiration date for assessment agreed upon by the taxpayer corporation and the Commissioner, consequently, the proposed assessment is not barred by the statute of limitations. Sections 280(b)(1) and 280(d) of the Revenue Act of 1926.

Walter Barton, Esq., and Raymond Cushwa, Esq., for the petitioner.

J. A. Lyon, Esq., and B. U. Steele, Esq., for the respondent.

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TRUSSELL

This proceeding is for the redetermination of liability as a transferee for the income and profits taxes for 1921 of the Elk City Ice, Fuel & Light Co., asserted by the respondent against the petitioner under section 280 of the Revenue Act of 1926 in the amount of $1,513.45.

The petitioner alleges a number of errors. Upon motion duly made and granted the issues were severed and a hearing was granted on the single issue of whether the proposed assessment is barred by the statute of limitations.

FINDINGS OF FACT.

An income and profits-tax return on behalf of the Elk City Ice, Fuel & Light Co. (hereinafter referred to as the corporation), Oklahoma City, Okla., for the calendar year 1921, was filed with the collector of internal revenue for the Oklahoma district on March 15, 1922, reporting in detailed schedules the gross income, various deductions, net income, and tax liability. This return was sworn to and subscribed before a notary on March 14, 1922, with the following signature: "Elk City Ice Fuel and Lt. Co., W. E. Corn, by Mrs. W. E. Corn."

Under date of November 5, 1925, the corporation, by its president, W. E. Corn, and its secretary, J. L. Corn, signed a written agreement consenting to waive the time prescribed by law for making any assessment of the amount of income and profits taxes due under any return made by or on behalf of the corporation for 1921; the waiver to remain in effect until December 31, 1926.

On the same day, November 5, 1925, the corporation executed a power of attorney to M. Cornelius and C. W. McKeehan, hereinafter referred to as the attorneys, constituting and appointing them its attorneys and agents with full power to represent the corporation in all matters relative to the liability of the corporation for income and profits taxes for 1921. This power of attorney was filed with and accepted by the Bureau of Internal Revenue.

The waiver signed on November 5, 1925, was forwarded on December 18, 1925, by the internal revenue agent in charge at Oklahoma City, to Washington for the signature of the Commissioner. The waiver is signed on behalf of D. H. Blair, Commissioner, being initialed by the signer.

Under date of May 28, 1926, the attorneys signed a written consent to the immediate assessment of a deficiency against the corporation for 1921 in the amount of $1,513.45. This deficiency was assessed on July 17, 1926.

The letter notifying the petitioner of the asserted liability as transferee was mailed on October 15, 1927, and the appeal to this Board was filed on December 10, 1927.

OPINION.

TRUSSELL: We are required to decide whether the proposed assessment against the petitioner as a transferee is barred by the statute of limitations.

Disclaiming all knowledge of the acts of the corporation other than those in evidence, the petitioner contends that the bar descended five years after the filing of the return by the corporation, and, therefore, long prior to the mailing of the notice to the petitioner. See sections 277(a)(2) and 280 (b)(1) of the Revenue Act of 1926. In this contention the petitioner relies upon a return filed on behalf of the corporation and introduced in evidence by the petitioner. On its face this return does not start the statute of limitations, for the reason that it was not sworn to and subscribed by any officer of the corporation. , sustaining . But consideration may not stop here. The return was in full detail as to gross income, deductions, net income and tax liability, and there would appear to be some ground for a conclusion that the return was subsequently validated by the corporation in its negotiations and agreements with the Commissioner or at any rate that the return was accepted, audited and thoroughly investigated by the Department as a valid return of the corporation. However, it appears unnecessary to give extensive consideration to this question for the reason that a so-called "waiver" is in evidence, signed on behalf of the Commissioner and by the corporation. If we decide that this waiver is valid to extend the period of limitation, then the contention of the petitioner is unallowable, even though we assume, without deciding, that the return would start the statute of limitations.

We think that the waiver is valid. It was forwarded to Washington for signature on behalf of the Commissioner in ample time to have been signed prior to the expiration of the statutory limitation, and we must presume that it was signed in time. Cf. ; ; affd., ; ; . The attorneys representing the corporation in tax matters were appointed on the same day when the waiver was signed by the corporation. We do not doubt that these attorneys were fully informed of the waiver, and we think they were satisfied of its validity when they consented to an immediate assessment of the deficiency against the corporation in May, 1926, at a time when the assessment was barred unless the waiver was valid.

The notice to be petitioner was mailed prior to the expiration of the statutory period of one year following the expiration date for assessment agreed upon in the consent. Section 280(b)(1) and section 280(d) of the Revenue Act of 1926. We, therefore, conclude that the proposed assessment is not barred by the statute of limitations.

This appeal will be restored to the Circuit Calendar for hearing on the remaining issues.