Alameda Park Co. v. Commissioner

ALAMEDA PARK COMPANY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Alameda Park Co. v. Commissioner Docket No. 8355. United States Board of Tax Appeals 25 B.T.A. 850; 1932 BTA LEXIS 1466; March 11, 1932, Promulgated *1466 The deficiency herein for the year 1917 is barred by the statute of limitations. George E. H. Goodner, Esq., for the petitioner. W. Frank Gibbs, Esq., for the respondent. LOVE *850 This proceeding, which involves a deficiency for the calendar year 1917, was previously before the Board on its merits, a report of which is published at 10 B.T.A. 1115. Later the Court of Appeals of the District of Columbia, in an opinion reported at 37 Fed.(2d) 805, held that the Board erred in refusing petitioner leave to amend its petition by adding thereto a plea of the statute of limitations, for the reason, as stated by the court, "It appeared prima facie by the undisputed facts in the record that at the date of the hearing the collection of the alleged deficiency was barred by the statute of limitations," and in its mandate ordered that "this cause be and the same is hereby remanded to the said Board of Tax Appeals for further proceedings not inconsistent with the opinion and decree of this Court." A further hearing was, therefore, held on the question of whether the collection of the deficiency of $4,457.69 for the year 1917 is*1467 now barred. FINDINGS OF FACT. Petitioner is a corporation. On April 1, 1918, it duly filed with the collector of internal revenue for the First District of California a corporation income-tax return for the calendar year 1917 showing a total tax assessable of $5,233.98. During March, 1923, the respondent assessed an additional amount of $7,847.25. On August 24, 1925, the respondent notified petitioner that its correct tax liability was $9,691.67; that there remained a deficiency in petitioner of $3,389.56; and that there remained a deficiency in payment of $4,457.69. *851 Negotiations regarding the tax liability of petitioner for the year 1917 were carried on between respondent and counsel for petitioner from March 12, 1924, to September 21, 1925, during which time there were filed with the respondent (1) a letter dated March 12, 1924, transmitting three copies of a brief on the merits of the case, (2) a letter dated March 17, 1924, transmitting a power of attorney, (3) a power of attorney attested to by petitioner's secretary on January 17, 1925, (4) a letter dated January 29, 1925, requesting a hearing, (5) a letter dated April 10, 1925, requesting copies of all*1468 communications be mailed to petitioner's counsel, (6) a letter dated May 23, 1925, transmitting an affidavit of the president of petitioner, (7) a letter dated July 13, 1925, requesting a conference before the income tax unit, and (8) a protest dated September 21, 1925, protesting the proposed action of respondent as set forth in respondent's letter to petitioner dated August 24, 1925. On October 23, 1925, petitioner filed its petition with this Board, asking for a redetermination of the deficiency set forth in respondent's notice to petitioner dated August 24, 1925. At some date between November 23, 1921, and October 28, 1925, there was filed in the office of the respondent the following undated and unlimited instrument. In re: Alameda Park Company, Alameda, Calif. (Date) IT:SA:SM MCW-3643 INCOME AND PROFITS TAX WAIVER. In pursuance of the provisions of subdivision (d) of Section 250 of the Revenue Act of 1921, Alameda Park Company, of Alameda, Calif. and the Commissioner of Internal Revenue, hereby consent to a determination, assessment, and collection of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of*1469 the said corporation for the years 1917 under the Revenue Act of 1921, or under prior income, excess-profits, or warprofits tax Acts, or under Section 38 of the Act entitled "An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes", approved August 5, 1909, irrespective of any period of limitations. (Signed) ALAMEDA PARK CO. Taxpayer. By R. C. STREHLOW. D. H. BLAIR, A Commissioner. If this waiver is executed on behalf of a corporation, it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sign for the corporation, in addition to which, the seal, if any, of the corporation must be affixed. *852 Affixed to the instrument in the lower left hand corner was the seal of petitioner. Stamped upon the instrument were the words and date: "Received Oct 28, 1925 Special Assessment Section." There was written along side this stamp the words "Not filing date." OPINION. LOVE: The question now under consideration is whether the collection of the deficiency for the calendar year 1917 is barred by the statute*1470 of limitations. In view of the findings of the Court of Appeals that "It appeared prima facie by the undisputed facts in the record that at the date of the hearing the collection of the alleged deficiency was barred by the statute of limitations," there was some question at the later hearing whether there was any burden upon petitioner to proceed further until the respondent had offered evidence in rebuttal. This question arose by reason of the fact that up until the date of the later hearing the filing date of petitioner's return for 1917 had not been received in evidence. It was held that the burden was upon petitioner to establish the filing date of its return. Petitioner then offered the return, including the filing date of April 1, 1918, stamped thereon which was received in evidence. Upon the establishment by petitioner that its return was filed on April 1, 1918, the importance of the above contested question disappeared, for at that stage of the proceeding the petitioner had established a prima facie case that the collection was barred by the statute of limitations. It is true that the assessment of the deficiency in question which was made in March, 1923, was within*1471 the five years provided for in section 250(d) of the 1918 and 1921 Acts, section 277(a)(2) of the 1924 Act, and section 277(a)(3) of the 1926 Act, but in the absence of a valid consent in writing provided for in section 250(d) of the 1921 Act and section 278(c) of the 1924 and 1926 Acts, or certain other exceptions not here material, the collection of such deficiency was barred on April 1, 1923. Bowers v. New York & Albany Lighterage Co.,273 U.S. 346. Russell v. United States,278 U.S. 181. We have held consistently that the burden is upon the respondent to prove that valid consents in writing have been filed if such consents are necessary to extend the time provided for in the general statute as to determinations, assessments and collections. See Farmers Feed Co.,10 B.T.A. 1069; Bonwit Teller & Co.,10 B.T.A. 1300; H. G. Stevens,14 B.T.A. 1120; Philadelphia Lawn Mower Co.,16 B.T.A. 435; Frank E. Harris Co.,16 B.T.A. 469; *1472 Annie P. Kountze,17 B.T.A. 928; Southwestern Investment Co.,19 B.T.A. 30; and Continental Oil Co.,23 B.T.A. 311. In T. W. Warner Co.,19 B.T.A. 872, after stating the rule that the burden of proving an *853 extension was upon the respondent, we said: "and he [the respondent] takes the risk of any defect in the documents upon which he relies as waivers." The so-called waiver introduced and relied upon by the respondent, which we have set out in full in our findings, was undated and unlimited as to its effective duration. If this instrument had been filed prior to April 11, 1923, it would have expired on April 1, 1924, which is prior to the mailing of the deficiency notice on August 24, 1925. Wirt Franklin,7 B.T.A. 636; Cunningham Sheep & Land Co.,6 B.T.A. 652; Henry M. Leland,8 B.T.A. 974; Theodore H. Wickwire, Jr., et al.,10 B.T.A. 102; National Tool Co. v. Routzahn, 28 Fed.(2d) 914; and *1473 Aiken v. Burnet,282 U.S. 277. We dot not know when the alleged consent in writing relied upon by the respondent was filed other than that, since it recites that it was executed in pursuance of the Revenue Act of 1921, it must have been filed after the passage of that act, which was on November 23, 1921, and which is prior to April 11, 1923. The date of October 28, 1925, can not be taken as the filing date for the reasons that there was written alongside this date, "Not filing date," and the special assessment section is only one of the several sections embraced in the income tax unit of the bureau of internal revenue of the Treasury Department. The stamp with the above notation in fact indicates that the alleged consent was filed in some other section before it was received in the special assessment section. As stated in our third paragraph above, the burden was upon the respondent to show when the instrument relied upon by him was filed. Having failed to sustain this burden, we hold that the collection of the alleged deficiency of $4,457.69 for the year 1917 is barred by the statute of limitations. Judgment of no deficiency will be entered.