Court Opinion

ID: 4499205
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:16:21.002243+00
Date Added: 2024-06-11T15:04:06.594528
License: Public Domain

Hill,
dissenting: Because of the provision of section 1112 of the Internal Revenue Code it is my opinion that the dismissal of this petition justifies a decision in favor of the Commissioner only in the amount of the deficiency determined by him exclusive of the additional amount determined under section 293 (b) of the code. Miller-Pocahontas Coal Co., 21 B. T. A. 1360. Cf. Board of Tax Appeals v. United States ex rel. Shults Bread Co., 37 Fed. (2d) 442.
*946It appears to me doubtful whether under the situation here presented the Board is authorized to dismiss the petition if such dismissal operates to exclude the so-called fraud penalty from the decision in favor of the Commissioner for the deficiency in tax determined by him. However, for the purpose of the views I wish here to express, I will assume that the Board has authority to dismiss the petition, with such consequences as legally follow.
I think the majority assumes an erroneous basis for its conclusion. It states that there is no “proceeding involving the issue whether the petitioner has been guilty of fraud with intent to evade tax” and that, therefore, there is no burden of proof here upon the Commissioner under section 1112.
Upon that premise the majority concludes that the Board may dismiss the petition and thereupon enter its decision in the amounts determined by the Commissioner for deficiency in tax and for the so-called fraud penalties. The mere proposal to enter a decision against the petitioner for an amount of money arising solely by reason of alleged fraud negatives the above statement that the proceeding involves no issue of fraud.
No question is presented as to the sufficiency of the matter set forth in the petition to present the issue of fraud. And wdiether so presented or not, fraud is never presumed. The petition in question was filed. Whether or not it should have been filed without the payment of the filing fee is beside the question. The fact is that the filing of the petition brought to the Board both the tax and the fraud controversies and prevented the Commissioner from assessing either the tax represented by the deficiency or the so-called fraud penalties until the proceeding instituted by the filing of the petition is disposed of by the Board. It does not matter that the petition is being dismissed merely for nonpayment of the filing fee rather than for nonprosecution. Certainly, this is not a case of lack of jurisdiction. Erving v. Dwyer, 18 B. T. A. 319; Reliance Manufacturing Co. v. Blair, 19 Fed. (2d) 798; Weaver v. Blair, 19 Fed. (2d) 16. It strikes me as axiomatic that unless a petition has been filed there is no petition for us to dismiss. And, of course, when a petition has been filed it presents the issues therein set forth. One of the issues pre- „ sented by the petition here is that of fraud with intent to evade tax. On that issue the Commissioner has the burden of proof under section 1112. So, I think it can not properly be said that under the situation here presented there is no “proceeding involving the issue whether the petitioner has been guilty of fraud with intent to evade tax.” The burden of proof provision in section 1112 is, therefore, applicable here.
It is true that until the petition has been served on the Commissioner and the latter has answered, the issues for decision have not *947been joined. But the issues tendered by the petition can not be swept aside as nonexistent unless or until the Board chooses to serve the petition on the Commissioner. The refusal or failure of the Board to serve a petition of which it has jurisdiction does not strip from the petition the involvement of the issues therein presented.
The principle underlying the order of dismissal in this proceeding can not, in my opinion, be distinguished from that involved in Miller-Pocahontas Coal Co., supra. I think, therefore, that under the order of dismissal here the decision of the Board should be confined to the amount of the deficiency for the tax determined by the Commissioner, exclusive of any amount arising by reason of alleged fraud.
Smith agrees with this dissent.