Carpenter v. Commissioner

SARA E. CARPENTER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Carpenter v. Commissioner Docket No. 19367. United States Board of Tax Appeals 16 B.T.A. 98; 1929 BTA LEXIS 2641; April 22, 1929, Promulgated *2641 Where prior to the determination by the Commissioner of a liability under section 280 of the Revenue Act of 1926, a part of the tax of the transferor has been paid and where subsequent to the filing of the petition with the Board and prior to the hearing the remainder of the tax has been paid, held, the liability of the transferee is extinguished. J. E. Mather, Esq., for the respondent. MILLIKEN *98 OPINION. MILLIKEN: By letter dated and mailed June 16, 1926, respondent proposed to assess against petitioner, as transferee of the assets of Farmers Dairy Co., a liability under section 280 of the Revenue Act of 1926 for two deficiencies in tax assessed against that company in the aggregate amount of $2,355.14. Within the statutory period petitioner filed her petition with the Board, in which she alleged several errors, which we will not discuss in view of the conclusion which we have reached. At the hearing of this cause on December 10, 1928, petitioner was neither present nor represented. Counsel for respondent produced no witnesses, but, in order to meet the burden of proof which rested upon him "to show that petitioner is liable as a*2642 transferee of the property" of the Farmers Dairy Co. (section 602 of the Revenue Act of 1928), filed certain letters and reports of revenue agents. Petitioner not being represented, of course no bojection was made to the introduction of such evidence, and for reasons which will appear we will not consider the question of its competency. Among the papers filed were a deficiency letter, in which respondent determined the deficiencies in tax against the Farmers Dairy Co. which constitute the basis of the liability determined against petitioner, and an attested copy of the records of the office of the collector of internal revenue at Scranton, Pa. The deficiency letter *99 addressed to the Farmers Dairy Co. is dated December 18, 1925. In this letter respondent informed the Farmers Dairy Co. that, in accordance with the provisions of section 274(d) of the Revenue Act of 1924, he had assessed against it a deficiency in income and profits taxes for the years 1921 and 1922 in the aggregate amount of $2,355.14. The deficiencies for the respective years were, for 1921 the sum of $2,172.50, and for the year 1922 the sum of $182.64. The attested copy of the records of the collector*2643 of internal revenue at Scranton, Pa., reads: As per your request of September 21st, 1928 for statement of account of the Farmers' Dairy Company for the years 1921 and 1922, wish to advise that said account, as per my records, is shown below: [1921] March 1922 List, Account Number 400419 Tax $951.74 3/15/22 $237.94 Pd. 6/15/22 237.93 Pd. 9/13/22 237.95 Pd. 1/6/23 237.94 Pd. $951.75 Dec. 1925 List, Dec. OOC, Spl. #6. Tax $2172.50 4/1/26 $434.93 Pd. 2/26/27 1,737.57 Pd. $2,172.50 July 1927 List, JI-530017 Int. $262.43 2/26/27 $262.43 Pd. Accrued interest at 6% on $1,737.57. [1922] March 1923 List, Account Number 400604. Tax $260.54 3/15/23 $65.14 Pd. 6/15/23 195.40 Pd. $260.54 Dec. 1925 List, Dec. OIC, Spl. #6. Tax $182.64 4/1/26 $182.64 Pd. The above record shows that the deficiency assessed for 1922 was paid on April 1, 1926, and that on the same date the amount of $434.93 was paid on account of the deficiency assessed for the year 1921. These payments were made prior to the date respondent determined the liability of petitioner and yet respondent determined that petitioner was liable for the whole deficiency. This*2644 record further discloses that the remainder of the deficiency assessed against the Farmers Dairy Co. was paid on February 26, 1927, and prior to *100 the date (September 22, 1927) respondent filed its answer in this proceeding. Since the whole of the tax for which respondent seeks to hold petitioner liable as transferee has been paid, it follows that whatever liability to the Government may have existed on her part has been extinguished. Judgment will be entered for the petitioner.