Shearer v. Commissioner

GEORGE L. SHEARER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. WILLIAM A. W. STEWART, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Shearer v. Commissioner Docket Nos. 29228, 29229. United States Board of Tax Appeals 18 B.T.A. 393; 1929 BTA LEXIS 2052; November 30, 1929, Promulgated *2052 The provisions of Title XII of the Revenue Act of 1924 do not authorize a 25 per cent reduction of tax on calendar year 1924 income reported in 1925 but taxable in part at 1923 rates under section 207(b) of the Revenue Act of 1924. Charles Colip,5 B.T.A. 123 followed. C. H. Butler, Esq., for the petitioners. L. A. Luce, Esq., for the respondent. GREEN *393 In these proceedings, which have been consolidated for hearing and decision, the petitioners seek a redetermination of their income-tax liabilities for the calendar year 1924, for which year the respondent has determined a deficiency as to George L. Shearer in the amount of $8,488.18, of which $6,811.08 is in controversy, and as to William A. W. Stewart in the amount of $7,435.71, of which $5,933.23 is in controversy. The sole question involved in both proceedings is whether the 25 per cent reduction provided by Title XII of the Revenue Act of 1924 reduces the calendar year 1924 tax payable in 1925, of an individual partner whose taxable income for the calendar year 1924 *394 is made up in part of a share of the income of a partnership whose fiscal year ended*2053 April 30, 1924. The facts were stipulated. FINDINGS OF FACT. The petitioners are individuals and residents of New York, with their offices located at 45 Wall Street, New York City. They made and filed their individual income-tax returns on the basis of a calendar year. The partnership of Stewart & Shearer, whose members are the petitioners herein, made and filed a partnership return of income on the basis of a fiscal year ended April 30, 1924. The respondent determined the net income of petitioner Shearer for the calendar year 1924 to be $103,613.53, of which amount $67,462.38 represents that part of the net income of the partnership attributable to the year 1923. He further determined that the tax on the income attributable to 1924 was $3,071.67, and that the tax on the income attributable to 1923 was $27,244.32. The respondent determined the net income of petitioner Stewart for the calendar year 1924 to be $91,165.35, of which amount $71,462.39 represents that part of the net income of the partnership attributable to the year 1923. He further determined that the tax on the income attributable to 1924 was $688.43, and that the tax on the income attributable to*2054 1923 was $23,732.92. OPINION. GREEN: The petitioners contend that under Title XII of the Revenue Act of 1924 the respondent should have reduced the tax on the income attributable to 1923 by 25 per cent. As previously stated, the amounts of taxes here in controversy are $6,811.08 as to Shearer, and $5,933.23 as to Stewart, which represents 25 per cent of the amounts of $27,244.32 and $23,732.92, respectively, set out in our findings as representing the tax on each of the petitioner's share of partnership net income attributable to the year 1923. We have held in a long list of decisions following , that the statute did not permit the 25 per cent reduction here contended for where the facts were such as are present in the instant proceedings. The respondent's determination must, therefore, be approved. See also , which case is now pending before the Circuit Court of Appeals for the Seventh Circuit, October term, 1929, as Docket No. 4188. Judgment will be entered for the respondent.