General Lead Batteries Co. v. Commissioner

General Lead Batteries Company, Petitioner, v. Commissioner of Internal Revenue, Respondent General Lead Batteries Co. v. Commissioner Docket No. 36199 United States Tax Court 20 T.C. 685; 1953 U.S. Tax Ct. LEXIS 108; June 29, 1953, Promulgated *108 Decision will be entered under Rule 50. Amount paid 3 years and 1 day before execution by both the Commissioner and the taxpayer of an agreement pursuant to section 276 (b), waiving the statute of limitations, held, not refundable under section 322 (d) notwithstanding that last day of 3-year interval fell on a Sunday. Leo M. Rogers, Esq.*109 , for the petitioner. Francis X. Gallagher, Esq., for the respondent. Opper, Judge. Van Fossan, J., dissents. OPPER *686 The Commissioner determined deficiencies in income tax, declared value excess-profits tax, and excess profits tax and penalty as follows: Income tax 25 per cent Taxable year ended Oct. 31 Deficiency penalty [1944] $ 1,978.70 [1945] 2,567.86 [1946] 29,922.44 Declared value excess-profits tax [1944] $ 3,165.63 Excess profits tax [1944] $ 21,040.47 $ 5,260.12 [1945] 40,103.68 [1946] 12,744.76 The only question before us is whether the refund of $ 2,500 of an agreed overpayment of $ 19,067.80 in income tax for the taxable year ended October 31, 1946, is barred by the statute of limitations. All other issues presented by the pleadings have been settled by stipulation of the parties. FINDINGS OF FACT. Most of the facts were stipulated and they are hereby found. Petitioner, a corporation with its principal office at Paterson, New Jersey, filed its returns for the taxable years involved with the collector of internal revenue for the fifth district of New Jersey. Petitioner is*110 entitled to a deduction for the taxable year ended October 31, 1946, in the amount of $ 209,199.85, representing an indebtedness duethe General Accounting Office of the United States Government because of defective batteries delivered to the United States Navy during World War II. The allowance of such deduction, together with other adjustments, results in a net operating loss for such taxable year instead of a net income of $ 57,381.69 as reported by petitioner in its return. On January 15, 1947, the last day for petitioner to file its returns for the taxable year ended October 31, 1946, petitioner filed tentative returns which reported an estimated total income tax due in the amount of $ 10,000, and paid one-fourth of such estimated tax, namely, $ 2,500. Prior to this petitioner had obtained from respondent an extension of time for filing its returns to March 15, 1947, conditioned upon the filing of tentative returns on or before January 15, 1947, and payment at that time of one-fourth of the total estimated tax shown to be due. *687 On March 14, 1947, petitioner filed its returns for the taxable year ended October 31, 1946, and reported income tax due in the amount of*111 $ 19,067.80. The dates on which petitioner paid the income tax reported due and its income tax liability for such taxable year are asfollows: Tax paid (and assessed) $ 19,067.80 Payments as follows: January 15, 1947 $ 2,500.00 March 14, 1947 2,266.95 August 6, 1947 9,533.90 October 17, 1947 4,766.95 Total payments $ 19,067.80 Tax liability None Overpayment $ 19,067.80 On January 3, 1950, the head of the technical staff, eastern division, acting on behalf of respondent, mailed a letter to petitioner enclosing a Form 872, Consent Fixing Period of Limitation Upon Assessment of Income and Profits Tax, undated providing for the extension of the period for assessment of income tax for the taxable year ended October 31, 1946. On Friday, January 13, 1950, petitioner, by its vice president and treasurer, F. J. Murtha, dated and signed the Form 872 and caused its corporate seal to be affixed thereto. The envelope in which the Form 872 was returned to the technical staff was mailed by F. J. Murtha at the Glen Ridge Post Office, Glen Ridge, New Jersey, some time between 5:20 and 5:30 p. m. on Friday, *112 January 13, 1950. In the ordinary course of the mails, a letter deposited in the Post Office at Glen Ridge, New Jersey, on Friday, January 13, 1950, at about 5:30 p. m. and addressedto the technical staff at 300 Military Park Building, Newark 2, New Jersey, would be enclosed by employees of the Post Office Department in a pouch labeled "Newark" and placed upon train No. 178 of the Lackawanna Railroad which left Glen Ridge at 8:14 p. m. of the same day. Such pouch would be removed from the train at the Newark Station some 10 or 15 minutes later and would be picked up by employees of the Newark Post Office the same evening. Such mail would be sorted and ready for delivery by the carrier on his first trip starting at 8 a. m., January 14, 1950. If delivered on that day, the letter would have been delivered to the office of the staff not later than 10 a. m. On January 14, 1950, and January 15, 1950, being respectively Saturday and Sunday, the offices of the technical staff were not open for the transaction of public business, but the door of the office of the *688 technical staff was equipped with a slot for the purpose of receiving mail or other documents when the office was*113 closed. Because the offices of the technical staff were closed on Saturday mornings, it was not the custom of the carrier to attempt to make delivery of mail addressed to it unless specificrequest was made by the staff for such delivery. The mail would remain at the Newark Post Office until Monday when delivery would be made not later than 10 a. m. Such action on the part of the carrier was not pursuant to instructions from the Post Office Department or the technical staff. Petitioner's Form 872 was received by mail in the offices of the technical staff at 60 Park Place, Newark, New Jersey, on Monday, January 16, 1950. On the same day it was executed by respondent and an executed duplicate original was mailed to petitioner at its offices in Paterson, New Jersey. Only $ 16,567.80 of the amount of $ 19,067.80 was paid within 3 years before the execution of the agreement, which agreement was executed within 3 years from the filing of the return. OPINION. The second Friday of January in the year 1950 fell on the 13th day of the month. That created unfortunate consequences for this taxpayer. His waiver of the statute of limitations which was mailed on that day was not delivered*114 to the Newark office of the Bureau of Internal Revenue on the following day, when in the ordinary course of mails it could have been, because the Bureau's office was closed on Saturdays. SeeFederal Employees Pay Act of 1945, Pub. L. 106, 79th Cong., 1st Sess., June 30, 1945. More than that, no effort was made to accomplish such delivery because the mail carrier had knowledge of this fact. Such cases as William Howard Doriss, 3 T. C. 219, would accordingly be inapplicable in any event. But the reason for the failure of the Bureau to receive the waiver before January 15 is not important. The controlling fact is not respondent's receipt or failure to receive notice, but the impossibility that, though exercising all diligence, he could affix his signature earlier than January 16. This is important because the statute 1 requires in unmistakable language that in order for an overpayment, which in this case is conceded, to be refundable the "agreement" must be executed *689 "by both the Commissioner and the taxpayer pursuant to section 276 (b)"; and that "agreement" is effective to authorize a refund under section 322 (d) only if it was so executed within 3*115 years after the payment in controversy was made, which in this case was January 15, 1947. In fact, petitioner himself states the issue to be "whether * * * the overpayment * * * for the year 1946, having been paid on January 15, 1947, was paid within 3 years before the execution by both the Commissioner and the petitioner of the agreement * * *." (Emphasis added.) *116 It matters not that the "agreement" is not a contract in the true sense, Florsheim Bros. Dry Goods Co., Ltd. v. United States, 280 U.S. 453;Stange v. United States, 282 U.S. 270, nor that the statutory requirement of the Commissioner's signature may originally have been inserted for purely administrative reasons. That it is a "requirement" is recognized in both the Florsheim and Stange cases. See also Aiken v. Burnet, 282 U.S. 277; Burnet v. Railway Equipment Co., 282 U.S. 295. And even if it be true that for purposes of section 276(b), and in spite of its express conditions, a waiver signed only by a taxpayer may be sufficient to waive the statute as to him, see McCarthy Co. v. Commissioner, (C. A. 9) 80 F. 2d 618, certiorari denied 296 U.S. 655; Mosier v. Goodcell, (D. C., S. D. Calif.) 49 F. 2d 391, the same may not be said of the requirement of section 322 (d) since the effect of the "agreement" there described is a waiver of the statute of limitations in behalf of the United States. The very reasoning of the McCarthy and *117 Mosier cases would seem to call for a signature on behalf of respondent beforesuch a waiver could become effective. See also Commissioner v. Hind, (C. A. 9) 52 F. 2d 1075. It can no longer be said of the signature by the Commissioner under those circumstances that it is purely for administrative reasons. In the light of the specific and unambiguous statutory language, and of the lack of evidence of any reason for a contrary legislative purpose, it would be presumptuous to conclude that a document required to be signed by both parties and affecting the interests of both need be signed by only one. And although the last day fell on Sunday 2*118 the time within which such an act may be performed is not extended merely because of that fact. National Casket Co., 16 B. T. A. 1141; G. C. M. 11650, XII-1 C. B. 325. There have been innumerable opportunities 3 to amend *690 sections 275, 276, and 322 if this authority did not represent the Congressional purpose. See Pleasant Valley Wine Co., 14 T. C. 519. Unfortunate as the conclusion may be for petitioner's pecuniary welfare, we see no alternative but to find that the payment in controversy was not made within the time required by section 322(d). Decision will be entered under Rule 50. Footnotes 1. SEC. 322. REFUNDS AND CREDITS. * * * * (d) OverPayment Found by Board. -- * * * No * * * credit or refund shall be made of any portion of the tax unless the Board determines as part of its decision (1) That such portion was paid * * * within two years before * * * the execution of an agreement by both the Commissioner and the taxpayer pursuant to section 276 (b) to extend beyond the time prescribed in section 275 the time within which the Commissioner might assess the tax * * * or (B) within three years before * * * the execution of the agreement * * * if * * * the agreement [was] executed within three years from the time the return was filed by the taxpayer, * * *↩ 2. "* * * There is a contrariety of views whether an act which by statute is required to be done within a stated period may be done a day later when the last day of the period falls on Sunday," citing "Pro: Street v. United States, 133 U.S. 299; Sherwood Bros. v. District of Columbia, 72 App. D. C. 155, 113 F. 2d 162; Wilson v. Southern R. Co., 147 F. 2d 165. Contra: Johnson v. Meyers, 54 F. 417; Meyer v. Hot Springs Imp. Co., 169 F. 628; Siegelschiffer v. Penn. Mut. Life Ins. Co., 248 F. 226; Larkin Packer Co. v. Hinderliter Tool Co., 60 F. 2d 491; Walters v. Baltimore & O. R. Co., 76 F. 2d 599." Union National Bank v. Lamb, 337 U.S. 38, 40. See also Campbell Chain Co., 16 T. C. 1402↩. 3. See e. g. Sam Satovsky, 1 B. T. A. 22↩; sec. 274, Revenue Acts 1924 and 1926.