Court Opinion

ID: 4613201
Source: CourtListenerOpinion
Date Created: 2020-11-20 19:52:54.086594+00
Date Added: 2024-06-11T07:59:39.071693
License: Public Domain

C. A. LAWTON CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.C. A. Lawton Co. v. CommissionerDocket No. 12863.United States Board of Tax Appeals13 B.T.A. 8; 1928 BTA LEXIS 3330; July 23, 1928, Promulgated *3330  Assessment and collection of the additional tax involved herein for the fiscal year ended March 31, 1921, are not barred by the statute of limitations.  Jesse I. Miller, Esq., for the petitioner.  J. L. Backstrom, Esq., for the respondent.  MARQUETTE *8  This proceeding is for the redetermination of a deficiency in income and profits taxes asserted by the respondent for the fiscal year ended March 31, 1921, in the amount of $1,268.42.  The only issue is whether assessment and collection of the additional tax are barred by the statute of limitations.  FINDINGS OF FACT.  The petitioner is and was during the years 1920 and 1921 a Wisconsin corporation engaged in operating a foundry and machine shop at De Pere, Wis.On or about June 8, 1921, the petitioner filed an income and profits-tax return for the fiscal year ended March 31, 1921, under the Revenue Act of 1918, and reported thereon a gross income of $88,109.45, a net income of $41,620.33, invested capital of $322,695.65, and tax due in the amount of $6,266.88.  In the return the petitioner claimed and took an exemption of $2,000 under item 9 of Schedule D.  On November 23, 1921, the Revenue*3331  Act of 1921 was passed.  On or about June 14, 1922, the petitioner filed a second income and profits-tax return for the fiscal year ended March 31, 1921, marked "Supplemental Return," and reported thereon net income of $41,620.33 and tax due thereon in the amount of $6,466.88.  The additional tax shown on the second return is due to the fact that on that return the petitioner did not claim the exemption of $2,000 which it had claimed and taken on the original return, and to which it was not entitled under the Revenue Act of 1921.  *9  In January 1923 the petitioner filed a third return marked "Amended Return," and reported thereon a gross income of $87,225.49, a net income of $40,043.75, invested capital of $315,850.38, and tax due in the amount of $5,974.  On March 9, 1926, the respondent, upon audit of the petitioner's original return for the fiscal year ended March 31, 1921, disallowed to the amount of $2,918.68 deductions taken by the petitioner for the exhaustion, wear and tear of its building and machinery, made certain adjustments in invested capital, and determined that there is a deficiency in tax for that year in the amount of $1,268.42.  In computing the petitioner's*3332  net income taxable at the rates prescribed by the Revenue Act of 1921 the respondent disallowed the exemption of $2,000 claimed on the original return.  The deficiency letter was mailed to the petitioner on March 9, 1926.  OPINION.  MARQUETTE: The only issue in this proceeding is whether assessment and collection of the deficiency asserted by the respondent in the deficiency letter of March 9, 1926, are barred by the statute of limitations.  We are of the opinion that they are not.  The evidence shows that the petitioner's original return was filed on June 9, 1921.  On or about June 14, 1922, it filed a supplemental return showing additional tax due thereon.  The additional tax arose from the fact that in the original return the petitioner had claimed and taken a specific exemption of $2,000 to which it was not entitled under the Revenue Act of 1921.  Since on account of changes or differences in the Revenue Act of 1921 from the Revenue Act of 1918, a larger tax was due from the petitioner than was shown on the original return, the petitioner was required to file a return for the fiscal year in question under the Revenue Act of 1921.  *3333  The situation here presented comes squarely within the scope of our decision in , and on the authority thereof we hold that the statute of limitations did not begin to run against the assessment and collection of the additional tax involved herein until June 14, 1922, and that the deficiency letter having been mailed to the petitioner within four years from that date, assessment and collection are not barred.  Reviewed by the Board.  Judgment will be entered for the respondent.