Court Opinion

ID: 4633052
Source: CourtListenerOpinion
Date Created: 2020-11-21 03:13:07.921229+00
Date Added: 2024-06-11T08:42:11.788516
License: Public Domain

WILLIAM J. HYNES, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Hynes v. CommissionerDocket No. 21382.United States Board of Tax Appeals16 B.T.A. 1272; 1929 BTA LEXIS 2417; June 29, 1929, Promulgated *2417  Where more than six years elapsed from the date of an assessment against a taxpayer to the enactment of the Revenue Act of 1926, an assessment against the transferee of the assets under section 280 of that Act is barred by the statute of limitations.  Edward P. Smith, Esq., and Lee I. Park, Esq., for the petitioner.  W. F. Gibbs, Esq., for the respondent.  SMITH *1273  This proceeding is for the purpose of determining the liability, if any, of the petitioner as transferee of the assets of the Hynes Elevator Co., for taxes due from it for the fiscal year ended June 30, 1917, in the amount of $23,915.39.  The petitioner claims that he is not liable for such tax upon the ground that the assessment and collection is barred by the statute of limitations.  FINDINGS OF FACT.  1.  The petitioner is a transferee as contemplated by section 280 of the Revenue Act of 1926 of the assets and property of the Hynes Elevator Co., with principal offices in the Grain Exchange Building in the City of Omaha, and State of Nebraska.  2.  The Hynes Elevator Co. was incorporated under the laws of the State of Nebraska in 1914.  3.  The Hynes Elevator Co. closed*2418  its books on a fiscal year basis in 1916, on July 31, and for the year 1917 on June 30 of that year.  4.  On July 25, 1917, the Hynes Elevator Co. filed an income-tax return (Form 1031) for the 11 months ending June 30, 1917, and on September 30, 1917, paid its income tax thereon in the sum of $2,218.09.  On September 12, 1917, the company filed an excess-profits-tax return (Form 1095) for the 11 months ended June 30, 1917, and in September, 1917, paid excess-profits taxes in the sum of $3,810.30, plus $85.76.  5.  The income-tax return filed on July 25, 1917, and the excess-profits-tax return filed on September 12, 1917, were the only returns filed by the Hynes Elevator Co. for the 11 months ended June 30, 1917; no return having been filed after the passage of the Revenue Act of October 3, 1917; and no additional return having been demanded or blank form furnished by the revenue department.  6.  On September 15, 1917, the Hynes Elevator Co. was legally dissolved and its assets transferred to the petitioner herein.  Said assets so transferred had a value of at least $23,915.39 when so transferred.  7.  On February 25, 1920, the Commissioner assessed against the Hynes Elevator*2419  Co. an additional tax in the amount of $23,915.39.  8.  On March 18, 1920, the collector at Omaha, Nebr., notified the Hynes Elevator Co. of this assessment and made demand on it for the payment of $23,915.39 within 10 days after the date of such notice.  9.  No proceedings have been had against the Hynes Elevator Co. since the date of the assessment referred to in paragraph 7 above, save and except the notice referred to in paragraph 8 above.  *1274  10.  On October 2, 1926, the Commissioner notified the petitioner of a proposed deficiency assessment in the amount of $23,915.39.  This proposed assessment was made under the provisions of section 280 of the Revenue Act of 1926.  OPINION.  SMITH: The sole issue presented by this proceeding is the petitioner's liability under section 280 of the Revenue Act of 1926 for the assessment of a tax claimed to be due from the Hynes Elevator Co. for the year 1917, which corporation was dissolved on September 15, 1917, and its assets, having a value of at least $23,915.39, transferred to the petitioner.  The petitioner claims nonliability for the tax by reason of the operation of the statute of limitations.  The authority of the*2420  respondent to assess against the petitioner a deficiency in income and profits tax due from the Hynes Elevator Co. for the fiscal period ended June 30, 1917, is section 280 of the Revenue Act of 1926.  Subdivision (b) of that section provides: The period of limitation for assessment of any such liability of a transferee or fiduciary shall be as follows: (1) Within one year after the expiration of the period of limitation for assessment against the taxpayer; or (2) If the period of limitation for assessment against the taxpayer expired before the enactment of this Act but assessment against the taxpayer was made within such period, then within six years after the making of such assessment against the taxpayer, but in no case later than one year after the enactment of this Act.  (3) If a court proceeding against the taxpayer for the collection of the tax has been begun within either of the above periods, then within one year after return of execution in such proceeding.  The assessment against the Hynes Elevator Co. for the additional tax due or claimed to be due for the fiscal period ended June 30, 1917, was made on February 25, 1920.  More than six years elapsed from the*2421  date of such assessment to the enactment of the Revenue Act of 1926, which was February 26, 1926.  Since it is clear that section 280 of the Revenue Act of 1926 was not intended to apply to transferees where the assessment had been made against the transferor more than six years prior to the date of the enactment of the Revenue Act of 1926, there is no provision of law authorizing the assessment of the tax against the petitioner.  The facts in this case are strikingly similar to those in the case of ; ; certiorari denied, . Judgment of no liability will be entered for the petitioner.