Court Opinion

ID: 4611341
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:48:46.445293+00
Date Added: 2024-06-11T07:59:42.532410
License: Public Domain

DUNSON MILLS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Dunson Mills v. CommissionerDocket No. 17019.United States Board of Tax Appeals10 B.T.A. 1150; 1928 BTA LEXIS 3949; March 2, 1928, Promulgated 1928 BTA LEXIS 3949">*3949  1.  The Board has jurisdiction of a proceeding instituted within 60 days after the mailing of a letter to the petitioner from the office of a collector of internal revenue, when such letter is the notification of the rejection of a claim in abatement and constitutes a final determination of a deficiency.  2.  The petitioner, as part of its case that the statute of limitations has run, need not allege and prove that it does not fall within the exceptions to the statute of limitations.  Chester A. Gwinn, Esq., for the petitioner.  J. F. Greaney, Esq., for the respondent.  SIEFKIN10 B.T.A. 1150">*1150  This is a proceeding for the redetermination of a deficiency in income and excess profits taxes for the fiscal year ended July 31, 1917, in the amount of $22,911.46.  The error assigned is that the tax liability, if any, has been extinguished by the statute of limitations.  FINDINGS OF FACT.  The petitioner is a corporation organized under the laws of the State of Georgia with its principal office at La Grange, Ga.  On September 29, 1917, the petitioner filed its income-tax return for the fiscal year ended July 31, 1917.  On March 28, 1918, it filed amended1928 BTA LEXIS 3949">*3950  returns for the same period.  On February 5, 1923, petitioner filed with the respondent an intrument in writing, designated a waiver, by the terms of which the time for determination, assessment and collection of taxes for the year 1917 was extended for one year from that date.  On January 31, 1924, the respondent mailed to the petitioner a jeopardy assessment notice.  On February 2, 1924, the respondent made a jeopardy assessment of an additional income and profits tax against petitioner for the fiscal year ended July 31, 1917, in the amount of $22,911.46.  The petitioner, on or about February 14, 1924, filed with the collector of internal revenue at Atlanta, Ga., a claim for abatement of this assessment.  On November 29, 1924, the respondent issued to petitioner a 30-day letter, advising that an audit of its income-tax return for the fiscal years ended July 31, 1917, and July 31, 1918, in connection with petitioner's books of account and records, disclosed a deficiency in tax amounting to $130,955.70.  The petitioner filed a protest, which protest was denied by respondent on June 29, 1925.  10 B.T.A. 1150">*1151  Petitioner received a notice dated April 12, 1926, from the Collector1928 BTA LEXIS 3949">*3951  of Internal Revenue at Atlanta, Ga., stating that a final determination had been made of petitioner's income-tax liability for the period ended July 31, 1917, and that the petitioner's claim for abatement and refund had been considered by the Commissioner and rejected in full.  The total amount stated to be due was $25,660.84.  Attached thereto was a demand for payment headed "Second notice and demand for tax." OPINION.  SIEFKIN: Two issues are before us for decision.  The first relates to our jurisdiction; the second to the statute of limitations.  As to jurisdiction, the respondent renews his contention, his motion to that effect having been previously overruled, that the notice and demand dated April 12, 1926, marked "Second notice and demand," and the letter of the same date from a collector of internal revenue, advising the petitioner that its claim for abatement had been considered by the Commissioner of Internal Revenue and rejected, did not constitute a notice of deficiency as to which a petition could be filed with this Board.  It is argued by the respondent that the designation of the notice and demand accompanying the letter as a "second notice" requires us to assume1928 BTA LEXIS 3949">*3952  that there was a first notice, and that we must infer that a first notice was properly sent as to which the petitioner might properly have filed a petition.  So far as the facts disclose, however, no such notice was sent and the letter from the collector relied on as the notice of deficiency appearing affirmatively to have been sent to the petitioner on instructions of the Commissioner, and to contain every element of a notice of deficiency which would give us jurisdiction, we hold that we have jurisdiction.  The contention of the respondent as to the statute of limitations is that the petitioner has failed to allege and prove all necessary facts to permit us to determine that the statute of limitations has run.  Specifically, the respondent contends that it is the duty of the petitioner who relies upon and pleads the statute of limitations, to negative, by pleading and proof, all exceptions in the statute.  He points out that there is no allegation in the petition, that no distraint or proceeding in court for collection of the tax was begun prior to the enactment of the Revenue Act of 1924 (relying on section 1109(b) of the Revenue Act of 1926), and that the petitioner has not alleged1928 BTA LEXIS 3949">*3953  and proved that no waivers were filed other than the one of February 5, 1923.  It is conceded by the respondent that no fraud is chargeable to the petitioner; that the case is not one within section 214(a)(9) or section 234(a)(8) of the Revenue Act of 1921, and that it is not a case involving final settlement of losses or other deductions 10 B.T.A. 1150">*1152  tentatively allowed by the respondent pending a determination of the exact amount deductible.  If respondent's position is not sound, it is obvious that the proposed deficiency is barred by the provisions of section 250(d) of the Revenue Act of 1921 since, under the decision of the Supreme Court of the United States in , collection was barred not later than March 28, 1924.  Collection was thus barred at the time the Revenue Act of 1924 was passed.  We have held, in considering the Revenue Act of 1921, that the proviso need not be negatived by the petitioner.  See . That case is controlling and we must hold that the deficiency is barred.  Judgment that there is no deficiency for the fiscal year ended July 31, 1917, will1928 BTA LEXIS 3949">*3954  be entered.