Court Opinion

ID: 4607177
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:40:04.65073+00
Date Added: 2024-06-11T07:53:29.759336
License: Public Domain

HOMER M. PRESTON, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Preston v. CommissionerDocket No. 9816.United States Board of Tax Appeals9 B.T.A. 645; 1927 BTA LEXIS 2531; December 19, 1927, Promulgated *2531  Determination and collection of tax held to be barred by the period of limitation prescribed by statute.  Wirt Franklin v. Commissioner,7 B.T.A. 636">7 B.T.A. 636. Fred R. Angevine, Esq., for the petitioner.  M. N. Fisher, Esq., for the respondent.  PHILLIPS *645  The taxes in controversy are income taxes for the calendar year 1917 in the amount of $162,385.46, arising from the denial of a claim for the abatement of an assessment of such taxes.  FINDINGS OF FACT.  The petitioner filed his income-tax return for 1917 on the 28th day of March, 1918, with the collector of internal revenue for the district of Oklahoma.  On the 26th day of October, 1922, the petitioner executed an instrument which was approved by the Commissioner on the 8th day of February, 1923, a copy of which is as follows: I, Homer M. Preston, an individual in consideration of the assurance given me by officials in the Income Tax Unit of the Bureau of Internal Revenue *646  that my liability for all Federal taxes imposed by the Act of Congress, approved September 8, 1916, as amended by the Act of Congress, approved October 3, 1917, on my net income received*2532  from all sources in said year, shall not be determined except after deliberate, intensive and thorough consideration, hereby waives any and all statutory limitations as to the time within which assessments based upon such liability may be entered.  It is understood, however, that I do not, by the execution of this waiver, admit in advance the correctness of any assessment which may be made against me for said year by the officials of the Income Tax Unit.  (Signed) Homer M. Preston, Approved: D. H. Blair, Commissioner of Internal Revenue, Dated Feb. 8, 1923.  STATE OF OKLAHOMA, COUNTY OF TULSA.  SS.: Subscribed and sworn to before me at Tulsa, Oklahoma, this 26th day of Oct. 1922.  (Signed) F. N. Gilbert, Int. Rev. Inspector.  The Commissioner, in April, 1923, promulgated the following: To Collectors of Internal Revenue, internal revenue agents in charge, and others concerned:The form of waiver now in use extends the time in which assessments of 1917 income and excess profits taxes may be made to one year from the date of signing by the taxpayer.  Inasmuch as there are many waivers on file signed by taxpayers containing no limitation as to the time in which*2533  assessments for 1917 may be made, all such unlimited waivers will be held to expire April 1, 1924.  D. H. Blair, Commissioner.  On the 20th day of February, 1924, there was mailed to the petitioner a letter setting out an underassessment of income tax for 1917 and granting him 30 days within which to file an appeal with the Commissioner in accordance with the provisions of section 250(d) of the Revenue Act of 1921.  Such letter reads as follows: An examination of your income tax returns for the calendar years 1917 and 1918 indicates that you have been underassessed in the amount of $162,385.46 for the year 1917, and overassessed in the amount of $4,606.89 for the year 1918 as shown in the attached statement.  In accordance with the provisions of section 250(d) of the Revenue Act of 1921, you are granted thirty days within which to file an appeal and to show cause or reason why this tax or deficiency should not be paid.  The appeal, if filed, must be addressed to the Commissioner of Internal Revenue, Washington, D.C. for the specific attention of IT:NR:F-1-HGF-3625-App.  It appears reasonable and fair, in the event that you desire to appeal from the conclusions set forth in*2534  this letter with respect to the adjustments for the years 1917 and 1918, to request that you sign and return the enclosed form of waiver, agreeing to an extension of time of one year beyond the statutory period of limitation, or the statutory period of limitation as extended by waivers already on file with the Bureau, within which additional tax may be assessed.  This will avoid the necessity of making an immediate assessment *647  and afford the Unit sufficient time to proceed in the regular manner to the consideration of the merits of your appeal or the additional information you desire to submit.  Treasury Decision No. 3492, setting forth the privileges of taxpayers in cases of appeal, is attached for your information and guidance.  Where a taxpayer has been given an opportunity to appeal and has not done so, as set forth above, and an assessment has been made, or where a taxpayer has appealed and an assessment in accordance with the final decision on such appeal has been made, no claim in abatement of the assessment will be entertained.  This assessment is in addition to all other outstanding and unpaid assessments appearing upon the Collector's lists.  Payment should*2535  not be made until a bill is received from the Collector of Internal Revenue for your District, and remittance should then be made to him.  Respectfully, (Signed) J. G. Bright, Deputy Commissioner.  On the 18th day of March, 1924, there was mailed to the petitioner a letter notifying him that an assessment would be made prior to entertaining hearing and determining any appeal.  Such letter reads as follows: An examination of your income tax return for the year 1917 indicates that you are subject to an additional tax of $162,385.46, as shown in Revenue Agent's report, a copy of which has been previously furnished you.  You are advised that in order that the collection of this tax may not be jeopardized by the delay incident to the giving of the usual thirty days' notice, as provided for in section 250(d) of the Revenue Act of 1921, an immediate assessment by the Commissioner of Internal Revenue will be made.  This assessment is in addition to all other outstanding and unpaid assessments appearing upon the Collector's lists.  The Bureau will, however, entertain a claim in abatement if filed within ten days of the receipt of notice and demand from the Collector of Internal*2536  Revenue for your district, in accordance with the provisions of Article 1006 of Regulations 62.  An appeal covering the basis of the claim should be filed, setting forth in full all information upon which you base your protest against the assessment as shown in this letter.  This appeal should be filed in triplicate and should be addressed to the Commissioner of Internal Revenue for the specific attention of IT:NR:F-1-HGF:3625.  A conference will be arranged prior to a final decision if a request is made for such conference.  If an appeal is not filed, payment should be made upon receipt of notice and demand from the Collector of Internal Revenue for your district.  Respectfully, Deputy Commissioner.  The tax here in controversy was assessed against the petitioner on the 29th day of March, 1924.  The petitioner filed a claim for the abatement of such assessment with the collector of internal revenue on April 3, 1924.  The Commissioner rejected this abatement claim by letter dated November *648  12, 1925.  The petitioner duly filed his appeal from this determination of the Commissioner.  No warrant of distraint has ever been issued against the petitioner, no notice*2537  of lien has been filed under the provisions of section 3186, Revised Statutes, and no suit in any Federal court has been instituted for the collection of the tax here in controversy.  OPINION.  PHILLIPS: The petitioner pleads that determination and collection of the tax here involved is barred by the period of limitations prescribed by statute and also sets up a defense upon the merits to such tax liability.  The facts in the instant case bring it squarely within the decision of this Board in , holding that in such circumstances as here exist the determination or collection of deficiencies would be barred after April 1, 1924, in the absence of some such factor as an estoppel against the taxpayer.  In view of our decision upon this question it becomes unnecessary to examine into the defense which is raised upon the merits. Reviewed by the Board.  Decision will be entered for the petitioner.