Keystone Coal & Mining Co. v. Commissioner

KEYSTONE COAL & MINING CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Keystone Coal & Mining Co. v. Commissioner Docket No. 10168. United States Board of Tax Appeals 10 B.T.A. 295; 1928 BTA LEXIS 4137; January 27, 1928, Promulgated *4137 The deficiency claimed herein by the Commissioner is barred by the statute of limitations. M. Brown & Co. v. Commissioner,9 B.T.A. 753, followed. Charles H. Garnett, Esq., for the petitioner. Dwight H. Green, Esq., for the respondent. GREEN *295 In this proceeding the petitioner seeks a redetermination of its income and excess-profits taxes for the fiscal year ended June 30, 1921, for which period the respondent has determined a deficiency of $3,298.57. The petitioner contends that the respondent erred in that he determined deficiencies in tax more than four years after the return was filed and more than four years after the taxes for the period in controversy had become due. It further alleges that the respondent erred in including in taxable income the income derived from leaseholds on unallotted tribal lands of the Choctaw and Chickasaw Indians, which said leases were made with the trustees of said Indian nations and approved by the Secretary of the Interior. FINDINGS OF FACT. The petitioner is a corporation with its principal office at Coalgate, Okla., where it is engaged in the business of mining coal. *4138 In 1917, it obtained a lease from the tribal trustees of the Choctaw and Chickasaw Indian nations by which it was authorized to mine coal on a royalty basis until September 25, 1932. This lease was in *296 accordance with the Federal statutes and was approved by the Secretary of the Interior. On September 14, 1921, the petitioner filed its income and excess-profits-tax return for the fiscal period ended June 30, 1921, with the collector of the district of Oklahoma and paid the tax shown on this return. This return was not false or fraudulent. No other income or profits-tax return was filed by or on behalf of the petitioner, either before or after the enactment of the Revenue Act of 1921. On June 3, 1925, a revenue agent made a complete audit and his report was transmitted to the taxpayer on June 12, 1925, together with a 30-day letter from the Commissioner. Subsequently another letter was sent to the petitioner by the Commissioner, on September 23, 1925. On November 9, 1925, the Commissioner mailed the petitioner a notice of his determination of a deficiency of $3,298.57 in income and profits-taxes for the fiscal year ended June 30, 1921. Within 60 days petitioner*4139 filed a petition with the Board for the redetermination of the alleged deficiency. The deficiency has not been assessed. No portion of the deficiency or additional tax determined and claimed by the Commissioner for the fiscal year ended June 30, 1921, results from any change or difference in the Revenue Act of 1921 from the Revenue Act of 1918. OPINION. GREEN: The petitioner contends that it is within the four-year period of limitation as provided in section 250(d) of the Revenue Act of 1921 and that this section is applicable to its return filed on September 14, 1921, for the fiscal year ended on June 30, 1921. The deficiency letter was mailed on November 9, 1925, more than four years after the filing of the return. The petitioner made and filed an income and profits-tax return on September 14, 1921, for the fiscal year ended June 30, 1921, and there was no claim that it was false or fraudulent with intent to evade the tax. The petitioner is not liable for an additional tax for such taxable year after the enactment of the Revenue Act of 1921 by reason of any change in the law. The material facts in this case are very similar to those in *4140 . In that case the Board held that a return properly filed for a fiscal year ended in 1921, but before the passage of the Revenue Act of 1921, was a legal return for the taxable year under the law and regulations, and operated to start the running of the four-year period of the statute of limitations, and that since the deficiency notice for the taxable year *297 was mailed more than four years after the return was filed, assessment and collection of the deficiency is barred. In view of our conclusion that the statute of limitations has run, it is not necessary to consider the petitioner's second allegation of error, i.e., that the income was derived from leases on unallotted tribal lands of the Choctaw and Chickasaw tribes of Indians and therefore not subject to tax. However, it has been decided by the United States Supreme Court in , that such income is taxable. . Judgment will be entered for the petitioner.