W. A. Sheaffer Pen Co. v. Commissioner

W. A. SHEAFFER PEN CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. W. A. Sheaffer Pen Co. v. Commissioner Docket Nos. 16788, 27036. United States Board of Tax Appeals 21 B.T.A. 661; 1930 BTA LEXIS 1814; December 12, 1930, Promulgated *1814 The Board has no jurisdiction where a deficiency notice is sent to a dissolved Missouri corporation and a Delaware corporation, which acquired its assets and assumed its liabilities, files a petition. Laurence Graves, Esq., for the petitioner. O. J. Tall, Esq., for the respondent. SEAWELL *661 The only issue presented for our decision is whether or not we have jurisdiction, the notices of deficiency in income and profits tax for 1920 having been addressed and mailed to the Kraker Pen Co., a Missouri corporation, and the petition in each case having been filed by the W. A. Sheaffer Pen Co., a Delaware corporation. FINDINGS OF FACT. On April 8, 1926, the respondent mailed to the "Kraker Pen Company, 2615 Walnut St., Kansas City, Missouri," a Missouri corporation, a notice stating there had been assessed against it for the year 1920 income and profits tax amounting to $4,381.85. On March 5, 1927, respondent mailed to the same company, at the same address and for the same year, a notice of an additional deficiency in income and profits tax in the amount of $655.99. The former notice was in reference to the deficiency in tax asserted in*1815 Docket No. 16788 and the latter to Docket No. 27036. *662 Within 60 days after the mailing of each said notice, the W. A. Sheaffer Pen Co., a Delaware corporation with its principal office in Fort Madison, Iowa, filed the petitions in these consolidated cases. The Kraker Pen Co. was dissolved December 31, 1921, its assets being acquired, and its liabilities assumed, by the W. A. Sheaffer Pen Co. Said companies filed consolidated returns for 1919 and 1920. Under date of October 27, 1926, a consent termed a "waiver," signed "Kraker Pen Company, Taxpayer, By W. A. Sheaffer Pen Co. By C. R. Sheaffer, Treasurer" and also signed by the Commissioner, purporting to extend the time until December 31, 1927, within which an assessment might be made against the taxpayer, was filed in the Bureau of Internal Revenue on or about November 1, 1926. The said waiver is now admitted in evidence only on the jurisdictional issue. On or about January 14, 1927, a letter addressed to the Commissioner was received in his office, stating in part that the Kraker Pen Co., through the W. A. Sheaffer Pen Co., a Delaware corporation which "acquired all the assets and assumed all the liabilities*1816 of said Kraker Pen Company upon dissolution * * * objects and protests against the additional income and/or profits tax liability for the calendar year of 1920 in the sum of $655.99," and that "said W. A. Sheaffer Pen Company does for itself as successor in interest of said Kraker Pen Company hereby object and protest" against the additional tax liability. The said letter was signed "Kraker Pen Company By W. A. Sheaffer Pen Company by C. R. Sheaffer, Its Treasurer. W. A. Sheaffer Pen Company By C. R. Sheaffer, Its Treasurer." C. R. Sheaffer swears to the truth of the statements contained in the aforesaid letter of protest. The petitioner moves for a dismissal in each of the cases, consolidated, on the ground that the Kraker Pen Co., having been dissolved December 31, 1921, could not take an "appeal" or file a petition and that as a consequence we are, in these proceedings without jurisdiction. The respondent was, on motion, permitted to so amend his answer in each of the cases as to aver that W. A. Sheaffer Pen Co. is the petitioner properly before the Board and that by virtue of the laws of Missouri, under which the Kraker Pen Co. was incorporated, the W. A. Sheaffer Pen Co. *1817 is liable for the deficiency in tax asserted by the respondent and that by the acts of the petitioner in holding itself out to be responsible for the tax deficiency in question and the respondent having relied upon representations to that effect, the petitioner, in addition to the liability for the deficiency which the statute placed upon it, became liable by reason of its representations of liability and respondent's reliance on the same. *663 OPINION. SEAWELL: In behalf of the respondent it is contended that this Board has jurisdiction for the reason that the petitioner acquired all the assets and assumed all the liabilities of the dissolved Kraker Pen Co., made such representations to the respondent who relied on the same, and, under such circumstances and the facts established by the evidence, the W. A. Sheaffer Pen Co. is in fact the petitioner properly before the Board. In support of such insistence, reference is made to section 10165 of the Revised Statutes of Missouri, 1919, vol. 3, which, in part, reads as follows: Any two corporations now existing under general or special laws, or which may be hereafter created, whose objects and business are in general*1818 of the same nature, may amalgamate, unite and consolidate said corporations and form one consolidated corporation, holding and enjoying all the rights, privileges, power, franchises and property belonging to each, and under such corporate name, as they may adopt or agree upon; * * * Provided that no such consolidation shall in any manner affect or impair the rights of any creditors of either of said corporations; * * * Section 10167 of said statutes states that section 10165 shall apply "only to corporations organized or created solely for manufacturing purchases." Counsel for the respondent cites as authorities sustaining his contention the following: ; ; ; ; ; and , in which latter case the decision of this Board was reversed. It is not necessary to discuss in detail the decisions relied on, for the reason that the facts and the applicable law in*1819 the instant case are different from the facts and the law applied in the cases supra. The Missouri statutes apparently were intended to apply only to corporations organized or created thereunder and the decisions of its court of appeals do not indicate otherwise. The Kraker Pen Co. was a separate entity from the petitioner. The former was incorporated under the laws of Missouri, the latter under the laws of Delaware. The deficiency in tax was asserted against the Kraker Pen Co. and not against the petitioner. The W. A. Sheaffer Pen Co., which acquired the assets and assumed the liabilities of the dissolved Kraker Pen Co., is the petitioner herein. There is no evidence that the stockholders of both companies were the same or that the assets and liabilities of the two were the same, which was the case in the Western Maryland Railway Co. case, supra, relied on by respondent. *664 The Kraker Pen Co. is the taxpayer to whom the deficiency notice was sent. the petitioner in these proceedings is not proceeded against as taxpayer and therefore is not a proper party. It is not made such by reason of the acquisition of the assets and the assumption of the liabilities*1820 of the Kraker Pen Co. nor by any other action shown by the evidence to have been taken by it. The instant case is controlled by numerous decisions of this Board. See ; ; and also , and other cases cited in all said cases. We have no jurisdiction as to the petitions filed in Docket Nos. 16788 and 27036 and the proceeding in each is dismissed for lack of jurisdiction. Orders of dismissal will be entered accordingly.