Goldwater v. Commissioner , 21 B.T.A. 73 ( 1930 )

HILL GOLDWATER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Goldwater v. Commissioner

Docket No. 21852.

United States Board of Tax Appeals

21 B.T.A. 73; 1930 BTA LEXIS 1934;

October 16, 1930, Promulgated

---

Where a corporation was dissolved in 1918 and distributed its assets and where such corporation filed returns under the Revenue Act of 1916 as amended by the Revenue Act of 1917, but no return was filed by, or on behalf of, the corporation under the Revenue Act of 1918, an additional tax against such corporation, pursuant to the Revenue Act of 1918, may be assessed against the transferee or transferees of its assets at any time.

Leon Samuels, Esq., and F. T. Andrews, C.P.A., for the petitioner.

J. E. Mather, Esq., and H. B. Hunt, Esq., for the respondent.

---

SEAWELL

This proceeding involves a deficiency in income and profits tax in the amount of $2,420.80 which the Commissioner has determined as an addditional tax liability of Goldwater Brothers & Levy, Inc., a dissolved corporation, for the period January 1, 1918, to June 14, 1918. The Commissioner is now seeking to collect the foregoing deficiency from the petitioner as transferee under the provisions of section 280 of the Revenue Act of 1926. The errors assigned relate (1) to the right of the Commissioner to collect the entire deficiency from the petitioner when there are alleged to be other transferees, and (2) to the statute of limitations.

FINDINGS OF FACT.

The petitioner is an individual with his office in San Francisco, Calif.

Goldwater Brothers & Levy, a California corporation, ceased doing business on June 14, 1918, and was formally dissolved by court decree on August 5, 1918. At the date of dissolution there were issued and outstanding 20,000 shares of the capital stock of the said corporation of a par value of $1 per share. At the same time petitioner owned 6,666 shares of the said stock and received $6,516.65 as a distribution in liquidation upon dissolution of the corporation. The remaining assets of the corporation were distributed to the other stockholders, the total amount distributed being $19,551.91 and the distribution being made on the basis of the shares of stock held by each stockholder. Subsequent to liquidation of the corporation the petitioner was requiredmto pay an additional tax on account of dividends received in liquidation.

Income and profits-tax returns (Forms 1031 and 1103) were filed by or on behalf of the corporation on October 8, 1918, for the period January 1, 1918, to June 14, 1918. The aforementioned returns were filed under the provisions of the Revenue Act of 1916 as amended by the Revenue Act of 1917. The tax as shown due by the foregoing returns was duly paid. Accompanying the returns was a statement to the effect that the corporation had been dissolved and that these were final returns for the period January 1, 1918, to June 14, 1918. No return was filed by or on behalf of the corporation pursuant to the Revenue Act of 1918.

Subsequent to 1918, the Commissioner determined that there was an additional tax due from the corporation under the Revenue Act of 1918 for the period January 1 to June 14, 1918, in the amount of $2,420.80, and the Commissioner assessed such additional tax in January, 1925.

On October 14, 1926, a notice of liability was mailed to the petitioner, advising him of his liability as "transferee" under the provisions of section 280 of the Revenue Act of 1926 for the foregoing additional tax of the corporation. A petition was duly filed on account of the aforementioned notice.

OPINION.

SEAWELL: The first question raised by the pleadings relates to the right of the Commissioner to collect the entire deficiency from the petitioner when there were other persons who likewise received assets upon the liquidation of the corporation. In view of the fact that it has been affirmatively shown that the assets received by the petitioner exceed the additional tax of the corporation now sought to be collected from such petitioner, this question must be decided against the petitioner on the authority of prior decisions of the Board. , and . See also .

The other contention advanced by the petitioner is that the deficiency is barred for the reason that no assessment was made against the corporation within five years from the date returns were filed for the period in question. It is true that the assessment was not made until more than five years after returns were filed pursuant to the Revenue Act of 1916 as amended by the Revenue Act of 1917, but the foregoing contention overlooks the fact that a return was likewise required under the Revenue Act of 1918 and that no such return was filed. Where a return is required under the Revenue Act of 1918 for a given year, the time for the assessment of any tax due under such act runs from the time such return was filed, even though a return was filed under a prior act. ; ; ; affd., ; ; and . See also ; affd., ; certiorari denied, . And of course where no return is filed the assessment may be made at any time. The deficiency with which we are concerned was determined under the Revenue Act of 1918 and, since no return was filed under such act, the assessment made against the corporation in January, 1925, was timely made. And we think it likewise follows that the statute has not run in favor of the petitioner (section 280(b)(1) of the Revenue Act of 1926). ; ; and . The fact that assessment was made against the corporation in January, 1925, would affect only the period for the collection of such tax from the corporation and would not alter the period for assessment. .

Judgment will be entered for the respondent.