Wilson Banking Co. v. Commissioner

WILSON BANKING CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Wilson Banking Co. v. Commissioner Docket No. 18952. United States Board of Tax Appeals 10 B.T.A. 898; 1928 BTA LEXIS 4007; February 20, 1928, Promulgated *4007 Deficiency held not barred. Chester A. Gwinn, Esq., for thf petitioner. M. N. Fisher, Esq., for the respondent. ARUNDELL *898 The petitioner seeks a redetermination of a deficiency in income and profits taxes for the calendar year 1918 in the amount of $6,596.91, being the rejected portion of a claim for abatement. Two issues were raised by the pleadings, but as to one of them the Board in Appeal of Wilson Banking Corporation,7 B.T.A. 885, decided adversely to petitioner for the years 1919 and 1920, and in view of that decision petitioner makes no point of the issue as to 1918. The remaining question is whether the deficiency is barred by the statute of limitations. FINDINGS OF FACT. The petitioner is a corporation engaged in the banking business at Greenwood, Miss. On March 8, 1919, petitioner filed with the collector at Birmingham, Ala., a tentative return and estimate of corporation income and profits taxes (Form 1031-T) for the calendar year 1918. On June 12, 1919, the petitioner filed with the collector a final corporation income and profits-tax return (Form 1120) for the calendar year 1918, disclosing*4008 total taxes in the amount of $2,833.47, which amount it paid. On February 29, 1924, the petitioner executed an income and profits-tax waiver for the calendar year 1918 which was effective one year from the date of execution. On March 11, 1924, the respondent made a jeopardy assessment of additional income and profits taxes for the calendar year 1918 in the amount of $30,360.46. This assessment is referred to by the respondent in the deficiency letter as "Additional, March, 1924, List, page 5, line O, Spl. 2, $30,360.46." *899 On or about March 26, 1924, the petitioner filed a claim for abatement of the additional assessment of $30,360.46, and on April 5, 1924, it filed with the collector for the district of Mississippi a bond, with sureties, to stay the collection of the assessment pending consideration of the abatement claim. On November 24, 1924, the respondent mailed to petitioner a 30-day letter which indicated a reduction in tax liability of $20,115.43 and a deficiency of $10,245.03, which adjustment was duly protested by the petitioner and application was made by the petitioner for assessment of its profits taxes for the year 1918 under section 328 of the Revenue*4009 Act of 1918, which application was granted. On June 3, 1926, respondent mailed to the petitioner the 60-day letter upon which the petition herein is based, allowing petitioner's abatement claim for $23,763.53 and rejecting it for $6,596.51. No part of the deficiency is attributable to a change in a deduction tentatively allowed under paragraph (9) of subdivision (a) of section 214, or paragraph (8) of subdivision (a) of section 234, of the Revenue Act of 1918. No proceedings, other than the one herein, have been commenced for the collection of the alleged deficiency. OPINION. ARUNDELL: There seems to be no question raised as to the date from which the statute runs, the petitioner admitting in its brief that it is June 12, 1919, when the final return was filed. See Dallas Brass & Copper Co.,3 B.T.A. 856, and Mattewan Manufacturing Co.,4 B.T.A. 953, to the effect that a so-called tentative return is not the return required by statute. Putting aside for the moment the effect of the waiver, the Commissioner had five years from June 12, 1919, or until June 12, 1924, in which to make an assessment. *4010 This he did on March 11, 1924, clearly within the statutory period. Why it took the form of a jeopardy assessment we do not know, and will not inquire. California Associated Raisin Co.,1 B.T.A. 1251. The period for assessment and collection under section 250(d) of the Revenue Act of 1921 not expiring until June 12, 1924, which is after the enactment of the 1924 Act, the case comes clearly within section 278(d) of the Act of 1924 and the Commissioner has six years in which to collect. See Art Metal Works v. Commissioner,9 B.T.A. 491, 493, and cases there cited. In view of the conclusion we have reached it becomes unnecessary to consider the effect of the filing of the waiver, the abatement claim, and the bond. Judgment will be entered for the respondent.