Isaac Goldmann Co. v. Commissioner

ISAAC GOLDMANN CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Isaac Goldmann Co. v. Commissioner Docket No. 11871. United States Board of Tax Appeals 17 B.T.A. 1103; 1929 BTA LEXIS 2185; October 28, 1929, Promulgated *2185 Where additional tax is due under 1921 Act, a return filed prior to its passage for a fiscal year ending in 1921 will not start the four-year period provided in the 1921 Act. Hutchinson Co.,14 B.T.A. 367, followed. Frederick Schwertner, Esq., for the petitioner. O. Bennett, Esq., for the respondent. MURDOCK *1103 The Commissioner determined a deficiency of $10,302.48 for the fiscal year ended April 30, 1921. The petitioner has waived all of its allegations of error except the one that the statute of limitation barred the determination and assessment of any deficiency. FINDINGS OF FACT. The petitioner is a corporation organized under the laws of the State of New York on May 1, 1900, with its principal office in New York City. It is engaged in the printing business. On July 9, 1921, it filed a corporation income and profits-tax return for the fiscal year ended April 30, 1921, on Form 1120, disclosing a tax liability of $15,830.26 and on Schedule A, item 27, $82,964.70 as net income for the taxable period. The amount of tax shown on this return has been paid. On January 14, 1922, an amended return for the same period*2186 was filed on the same kind of a form. Attached to this amended return was a statement that it was filed in accordance with the provisions of Treasury Decision *1104 3320. The amended return showed the same net income for the taxable period as was shown on the previous return, but showed a reduced amount of invested capital and disclosed an additional tax liability of $2,254.17 which has been paid. On both returns the petitioner claimed an exemption of $2,000. Both of these returns were prepared by accountants from the petitioner's books and were believed by the president of the petitioner to be honest returns. On December 14, 1925, the Commissioner mailed his deficiency notice to the petitioner. In his determination of the deficiency the Commissioner did not disallow the exemption of $2,000 which had been claimed by the petitioner, but the deficiency determined resulted entirely from other adjustments. No consent in writing has ever been entered into by the petitioner with respect to its tax liability for the period in question, although it was requested to sign a waiver enclosed in a letter from the Deputy Commissioner entered June 29, 1925. The petitioner filed*2187 its petition in this case with this Board on February 10, 1926. The case was set for hearing on September 12, 1928, but as there was no appearance for the petitioner, the proceeding was dismissed for lack of prosecution and judgment entered for the Commissioner. Thereafter on October 6, 1928, the amount of $10,302.48, together with interest in the amount of $4,233.82, was assessed. Prior to that time no proceeding in court or otherwise was ever instituted for the collection of the tax and interest. On October 2, 1928, the petitioner filed a motion to have the Board's order of dismissal vacated and on November 21, 1928, the motion was granted and the case was ordered to be and was heard on January 21, 1929. OPINION. MURDOCK: This is another case where the taxpayer having a fiscal period ending in 1921 filed a return prior to the passage of the Revenue Act of 1921. This Act increased the tax liability of this taxpayer in at least one particular, i.e., under the 1921 Act this taxpayer was not entitled to the exemption of $2,000 allowed under the 1918 Act and claimed on the return filed. Thus, it owed additional taxes under the 1921 Act. It contends that the filing of this*2188 return started the four-year period of limitation provided by the Revenue Act of 1921 in section 250(d) for taxes due under any return made under that Act for the taxable year 1921. If it is correct in this contention, determination and assessment was barred before December 14, 1925, the date of the deficiency notice. But if this return did not start the running of the four-year period, then the respondent has made his various moves in due time, for if the five-year period provided for returns made under prior Acts should *1105 apply, or if the return filed in January, 1922, started the four-year period, or if no return has been filed which would start the four-year period, in any of these three situations the letter of December 14, 1925, was timely. It is worthy of note that the petitioner claimed the exemption of $2,000 on its return filed January 14, 1922, even though at that time the Revenue Act of 1921, which did not allow such an exemption, had been passed, and the Commissioner failed to note the discrepancy in his final determination of the deficiency. We hold, following the reasoning in *2189 Hutchinson Co.,14 B.T.A. 367 and cases there cited, that on December 14, 1925, the Commissioner was not barred from determining and assessing a deficiency as to this taxpayer for its fiscal period ending April 30, 1921. See, also, Valentine-Clark Co.,14 B.T.A. 562. Judgment will be entered for the respondent.