Court Opinion

ID: 4491431
Source: CourtListenerOpinion
Date Created: 2020-01-17 22:02:52.789873+00
Date Added: 2024-06-11T15:03:43.309558
License: Public Domain

Murdock,
concurring: I agree with the decision of this case but desire to set forth my reason for so doing.
The Revenue Act of 1926 was not intended to and did not authorize the assessment or collection of any tax which at the time of its enactment could not be assessed or collected because of the bar of the statutory period of limitation properly applicable thereto. See section 278 (e). Section 278 (d) of that act provides that a tax may be collected within six years after a timely assessment. Section 280 (b) provides a period of limitation for assessment of transferee liability, but collection of taxes from transferees must be made in the same manner and subject to the same provisions and limitations as in the case of a deficiency in tax imposed by Title II of the Revenue Act of 1926. See section 280 (a). Bearing in mind this „provision of section 280 (a), and reading section 280 (b) in the light of section 278 (d) and (e), I am convinced that the Revenue Act of 1926, and particularly section 280 thereof, was not intended to and did not revive remedies for the enforcement of tax liabilities, where, prior to the enactment of the Act, the statutory period of limitations had already barred assessment or collection.
*405Section 280 (b) of the Revenue Act of 1926 provided an entirely new procedure for the enforcement of a liability of a transferee, and at the same time, in subdivision (b), it provided a period of limitation for the assessment of any such liability. Prior to the enactment of that act, no such method of enforcement was available to the Commissioner, and there was no provision for the assessment of the liability of the transferee in respect to the tax imposed upon the transferor. It does not follow, however, that the Government could assert a claim against and collect a tax from a transferee under these prior acts after the statute of limitations had run against the original taxpayer. Suit or proceeding for collection from a transferee could not have been begun after the time had expired within which a suit or proceeding for collection from the taxpayer trans-feror had expired. Russell v. United States, 278 U. S. 181; United States v. Updike, 281 U. S. 489; United States v. American Exchange Irving Trust Co., 43 Fed. 829.
In one class of cases section 280 (b)’ (1) gave the Government an additional year in which to proceed against the transferee after it could no longer proceed against the transferor. This class of cases is where both the period for assessment and collection again'st the taxpayer transferor were permitted to expire after the enactment of the Revenue Act of 1926, and before notice to or assessment against the transferee. I know of no reason why Congress did not have the power to fix the statutory periods of limitation which it did fix in section 280 (b). Therefore, I see no difficulty in applying the plain words of section 280 (b) where the facts in any given case bring it within either one of its provisions, but do not show that assessment or collection was barred before the enactment of the Revenue Act of 1926.
Sections 1106 (a) and 280 (b) both appear for the first time in the Revenue Act of 1926, and there is no reason to believe that the general provisions of section 1106 (a) supersede the specific provisions of section 280 (b). Therefore, in all transferee cases it is important to see whether or not the Commissioner has moved against the transferee within the time given him by section 280 (b). If he has, and if collection from the transferee was not barred before the enactment of the Revenue Act of 1926, then it matters not what the Commissioner’s rights are against the transferor, for in such cases the bar of the statute has not run as to the liability of the transferee in respect of the tax imposed upon his tranferor, and section 1106 (a) does not have any effect.
The cases all fall within two general classes depending upon the condition of the Commissioner’s remedy at the time of the enactment of the Revenue Act of 1926. In all of those cases of transferee *406liability where prior to the enactment of the Revenue Act of 1926 the statute had. run against assessment or collection from the taxpayer transferor and likewise, therefore, against collection from the transferee, section 280 (b) has no effect. It does not revive a remedy once dead, and the transferee has a complete independent defense. If section 1106 (a) extinguishes the liability, the fact is of no particular importance in the decision of such cases. In all cases of transferee liability, where the Commissioner’s remedy against the taxpayer and likewise against the transferee was still alive on the date of the enactment of the Revenue Act of 1926, the question of the continuation of that remecty against the transferee depends upon whether or not the Commissioner 'has proceeded against the transferee timely under section 280 (b). If he has, section 1106 (a) does not effect an extinguishment of the liability. If he has not, then that fact is a complete defense to the transferee and it is not important in the decision of such cases that section 1106 (a) extinguishes the liability.
There are a number of decisions of this Board on this subject in which different reasoning has been employed, but, so far as I have been able to determine, the result reached in each of those cases has been the result which would have been reached had the principles herein expressed been applied.