Court Opinion

ID: 4592610
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:08:21.510617+00
Date Added: 2024-06-11T07:50:53.644776
License: Public Domain

KLAUBER EMBROIDERY WORKS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.Klauber Embroidery Works v. CommissionerDocket No. 12433.United States Board of Tax Appeals11 B.T.A. 779; 1928 BTA LEXIS 3724; April 23, 1928, Promulgated *3724 Arthur B. Hyman, Esq., for the petitioner.  Brice Toole, Esq., for the respondent.  LITTLETON*779  The Commissioner determined a deficiency of $1,935.22 for the fiscal year ending July 31, 1920.  Petitioner filed an original and an amended petition with the Board in which it claims that assessment and collection of the deficiency are barred by the statute of limitations and that if assessment and collection are not barred, the Commissioner erred in refusing to allow the petitioner a deduction of $1,097.35 representing taxes paid to the State of Maine.  FINDINGS OF FACT.  Petitioner is a Maine corporation with principal office and place of business in New York City, N.Y.Petitioner's return for the taxable year was made upon the accrual basis.  At June 30, 1920, real estate tax in the amount of $748 and personal property tax in the amount of $349.35 accrued, which tax the petitioner was permitted to pay on or before December 10, 1920.  These taxes, totaling $1,097.35, were paid by petitioner on August 26, 1920.  Petitioner's return for the fiscal year ending July 31, 1920, was filed with the collector of internal revenue on September 27, 1920. *3725  September 1, 1925, petitioner and the Commissioner entered into a written consent as follows: In pursuance of the provisions of existing Internal Revenue Laws The Klauber Embroidery Works, a taxpayer of 83 Fifth Avenue, New York, N.Y., and the Commissioner of Internal Revenue hereby waive the time prescribed by law for making any assessment of the amount of income, excess-profits, or warprofits taxes due under any return made by or on behalf of said taxpayer for the year (or years) 1920 under existing revenue acts, or under prior revenue acts.  This waiver of the time for making any assessment as aforesaid shall remain in effect until December 31, 1926, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days, or (2) if an appeal is filed with said Board then said date shall be extended by the number of days between the date of mailing of said notice of deficiency and the date of final decision by said Board.  The Commissioner's notice of his determination of the deficiency*3726  here involved was mailed to the petitioner on December 30, 1925.  *780  OPINION.  LITTLETON: The petitioner employed the accrual method of accounting and made its return upon that basis.  The State taxes in question became due and were a fixed liability of petitioner on June 30, 1920, notwithstanding petitioner had until December 10 within which to make payment.  The taxes, totaling $1,097.35, constituted a proper deduction from gross income for the fiscal year ending July 31, 1920.  The Commissioner's determination of the deficiency here in question was made within the statutory period of limitations as agreed upon by the petitioner and the Commissioner, and assessment and collection of any deficiency which may be due are not barred by the statute of limitations.  Judgment will be entered on 15 days' notice, under Rule 50.