Court Opinion

ID: 4602747
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:30:25.403327+00
Date Added: 2024-06-11T07:52:43.786780
License: Public Domain

ENGLAND WALTON & COMPANY, INC., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.England Walton & Co. v. CommissionerDocket No. 42115.United States Board of Tax Appeals25 B.T.A. 1091; 1932 BTA LEXIS 1430; April 7, 1932, Promulgated *1430  1.  Waivers limited by their terms to assessment held, under the circumstances, to allow collection within the extension period.  2.  The period for collection against the taxpayer not having expired until December 31, 1927, a transfered notice to the petitioner within a year thereafter is timely.  Robert A. Littleton, Esq., for the petitioner.  J. A. Lyons, Esq., for the respondent.  ARUNDELL*1091  Proceeding for the redetermination of the liability of the petitioner as a transferee for the following income and excess-profits taxes and interest: 1916TaxesTaxpayerTaxInterest191719181919Junaluska Leather Co$19.051 $2.40$1,311.81Chilhowee Extract Co436.7254.95$12,992.124,873.87$66,793.13Schlosser Leather Co128.102 16.12835.263,147.8816,738.27Unaka Tanning Co860.892 108.3226,130.592,606.991,992.72Carroll Oak Tanning Co300.871 37.862,615.091,139.962,924.52 Do15.832 1.99The transferee liability of petitioner for unpaid taxes and interest of the taxpayers*1431  for 1916 and 1917, except in the case of the Carroll Oak Tanning Company, has been agreed upon by the parties.  It has been further stipulated that assessment and collection of the *1092  liabilities asserted for 1918 and 1919 are barred by the statute of limitations.  The single question remaining is whether collection of the liability of petitioner for unpaid taxes of the Carroll Oak Tanning Company for 1917 is barred by the statute of limitations.  The facts were stipulated.  FINDINGS OF FACT.  The petitioner, a Delaware corporation, was the sole stockholder of the Carroll Oak Tanning Company, hereinafter referred to as the "taxpayer." On July 1, 1919, at the time of the taxpayer's liquidation, petitioner received in distribution physical assets of the taxpayer of a value in excess of $2,002.43, the amount of taxes the parties now agree to be due from the taxpayer for 1917.  The taxpayer's returns for 1917 were filed on May 22, 1918.  The income and profits taxes of $6,686.20 shown to be due on the returns were assessed and paid on June 26, 1918.  In July, 1921, the respondent made an additional assessment of $11,256.62.  A claim in abatement was filed which was allowed*1432  in the amount of $8,641.53 and rejected for $2,615.09.  This action took place on October 25, 1927, and was scheduled and allowed on April 27, 1928.  On March 25, 1921, the taxpayer and respondent executed an assessment waiver for 1917 having no expiration date.  This instrument expired on April 1, 1924.  On February 14, 1924, they executed a waiver for the determination, assessment and collection of taxes for 1917 until April 1, 1925.  On November 23, 1925, and November 24, 1926, they executed assessment waivers for the years 1909 to 1917, inclusive, expiring on December 31, 1926, and December 31, 1927, respectively.  No deficiency notice as provided by sections 274 and 280 of the 1924 Act, or by sections 274(a), 283(e) and 283(k) of the 1926 Act, has been mailed by the respondent to the taxpayer in respect to the assessment or collection of a deficiency in tax for 1917.  On October 30, 1928, the respondent mailed a deficiency notice to the petitioner under the provisions of section 274 of the 1926 Act, in which he proposed to assess against it under the provisions of section 280 of the 1926 Act, a tax of $2,615.09 due from the taxpayer for 1917.  No proceeding in court has been*1433  begun against the taxpayer for the collection of said tax, and no proceeding in respect thereto has ever been pending before this Board.  OPINION.  ARUNDELL: Petitioner's position is that the last two waivers served only to extend the period for assessment of the 1917 tax, and not its collection.  This view, however, we think is precluded by . There the same argument was made, but, as the court pointed out, something more than a futile act was intended by the agreement between the parties and the intention of the parties was to extend not only the period for assessment, but the period for collection.  At the time the waivers in the instant case were given, the tax had long been assessed and the claim in abatement was filed, and it was during the pendency of the abatement proceedings that the waivers were given.  To construe the instruments as meaning that the parties had in mind simply the assessment of some additional amount other than that already assessed and that the Commissioner was not concerned with the collection of the amount he had already determined and assessed seems to us an altogether unreasonable*1434  interpretation of the agreement entered into by the parties.  The waivers were sufficient to extend the period for collection.  ;; . Nor are we impressed with petitioner's argument that section 278(d) of the 1924 and 1926 Acts, in providing different periods of limitation for assessment and collection, necessarily requires separate waivers for assessment and collection, and that , is not controlling.  The intention of the parties was to extend the period for collection and we see nothing in section 278(d) to prevent giving effect to that understanding.  The waivers extended the time for collection to December 31, 1927.  Within less than a year thereafter liability for taxes due from the taxpayer was asserted against the petitioner as transferee.  The notice was timely.  ; *1435 . For the years 1916 and 1917 decision will be entered for the respondent.  For the years 1918 and 1919 decision will be entered for the petitioner.Footnotes1. Jan. 1, 1916, to Oct. 31, 1916. ↩2. Nov. 1, 1916, to Dec. 31, 1916 ↩