Court Opinion

ID: 4611833
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:49:48.769747+00
Date Added: 2024-06-11T07:54:19.930950
License: Public Domain

CHARLES D. JAFFEE, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.  LOUIS J. JAFFEE, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.  JULIUS SCHWARTZ, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.  HARRY H. SCHWARTZ, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Jaffee v. CommissionerDocket Nos. 26587-26590.United States Board of Tax Appeals18 B.T.A. 372; 1929 BTA LEXIS 2064; November 29, 1929, Promulgated *2064  1.  Petitioner held to be transferees of the assets of Schwartz & Jaffee, Inc., within the meaning of section 280 of the Revenue Act of 1926.  2.  Henry Cappellini et al.,14 B.T.A. 1269">14 B.T.A. 1269, followed.  Harry T. Lore, Esq., for the petitioners.  J. E. Mather, Esq., for the respondent.  ARUNDELL*372  The respondent proposes to assess against each of these petitioners as transferees of the assets of Schwartz & Jaffee, Inc., the deficiencies determined against that corporation for the fiscal years ended October 31, 1919, and October 31, 1920, in the respective amounts of $22,708.85, and $9,686.58.  The petitions and answers raise issues as to the constitutionality of section 280 of the Revenue Act of 1926, as to the statute of limitations, as to the computation of invested capital of Schwartz & Jaffee, Inc., and as to the failure of the respondent to compute profits taxes under the special assessment provisions of the Revenue Act of 1918.  On motion of counsel for the petitioners a hearing was granted on the statute of limitations issue in advance of the other issues and a decision on the limitations question was rendered under*2065  date of September 28, 1929, and is reported in 17 B.T.A. 675">17 B.T.A. 675. At the present hearing a stipulation was filed relating to the liability of the petitioners as transferees and we take it that the other questions raised by the petitions are now abandoned by the petitioners.  We set forth here the stipulation as our findings of fact.  FINDINGS OF FACT.  That there were assessed against Schwartz & Jaffee, Inc., a corporation organized under the laws of the State of New York, upon respondent's April, 1926, Special List, additional income and profits taxes for the fiscal year ended October 31, 1919, in the sum of $22,708.85 and for the fiscal year ended October 31, 1920, in the sum *373  of $9,686.58, which said assessments with interest are wholly outstanding and unpaid.  That on March 8, 1922, the Secretary of State of the State of New York issued to Schwartz & Jaffee, Inc., a certificate of dissolution.  That subsequent to the issuance of such certificate the trustees upon dissolution caused to be distributed to the stockholders of said corporation all of its property and assets in liquidation of its capital stock.  That these petitioners were the sold stockholders*2066  of said corporation and each received in liquidation of the capital stock of Schwartz & Jaffee, Inc., owned and held by him a sum in excess of the amount of the deficiencies with interest, involved herein.  That petitioners by entering into this stipulation do not waive their objections to the constitutionality of section 280 of the Revenue Act of 1926 or their right to appeal from the decision of the United States Board of Tax Appeals, promulgated herein on September 28, 1929, and the order of said Board denying the motion for reconsideration of said decision dated October 10, 1929, or their defense of the statute of limitations, against the assessment and/or collection of the deficiencies involved in this proceeding alleged to be due from Schwartz & Jaffee, Inc.  OPINION.  ARUNDELL: As set forth above we assume that the petitioners have abandoned the errors alleged as to the respondent's computation of invested capital and his failure to compute the profits taxes of Schwartz & Jaffee, Inc., under the special assessment provisions, but if we are wrong in our assumption, we dispose of the alleged errors by affirming the respondent because of the lack of any evidence to support*2067  the petitioners' claims.  At the hearing counsel for petitioners stated that he does not admit that the petitioners are transferees under section 280 of the Revenue Act of 1926.  However, in view of the facts stipulated there can be no doubt that the petitioners are transferees of the property of Schwartz & Jaffee, Inc., and the respondent is thus relieved of the burden of proof placed on him by section 602 of the Revenue Act of 1928.  See Louis Costanzo et al.,16 B.T.A. 1294">16 B.T.A. 1294, 1296, and John R. Brewer,17 B.T.A. 713">17 B.T.A. 713. The remaining contention of petitioners as to the validity of section 280 of the Revenue Act of 1926, is disposed of by our decision in Henry Cappellini et al.,14 B.T.A. 1269">14 B.T.A. 1269. Decision will be entered for the respondent in each case.