McFetridge v. Commissioner , 9 B.T.A. 759 ( 1927 )

OPINION.

Love :

The respondent in his notice of deficiency, dated November 25,1925, proposed a deficiency in tax for the year 1924 in the amount of $297.52. The petitioner appealed from his action in determining that deficiency and alleged that the respondent erred in disallowing the application of 25 per cent reduction to that portion of her income returned for 1924 which came from the proportionate 1923 earnings of her partnership, which had a fiscal year. The entire deficiency resulted from such action by the respondent and consequently the issue presented is determinative thereof.

As is set forth in the findings of fact, the parties hereto by stipulation agreed that the respondent had erred in computing the surtax, as stated in his notice of November 25, 1925, and that the notice of February 11,1926, was simply a correction of that error and that the correct computation of the deficiency appealed from was $465.47.

The issue presented as to whether the respondent erred in disallowing the application of 25 per cent reduction to that portion of petitioner’s income returned for 1924 as came from the proportionate 1923 earnings of her partnership, which had a fiscal year, and upon which the deficiency of $465.47 is predicated, must be resolved in favor of the respondent upon the authority of the Board’s decision in Charles Colip, 5 B. T. A. 123, as the identical issue was presented therein. Having resolved the sole issue presented by the pleadings and upon which the deficiency of $465.47 is predicated in favor of the respondent, it is necessary for us to consider the respondent’s motion to increase that deficiency to $686.35 as disclosed by his notice of December 23, 1926.

The increased deficiency as shown in the notice of December 23, 1926, arises by reason of the findings of a revenue agent that the petitioner’s partnership income should be increased by the amount of $1,339.50, and that the amount of $312.66 foreign interest should be included in income, which results in a net increase of the deficiency to the extent of $220.88. The petitioner did not appeal from the respondent’s determination as evidenced by his notice of December 23, 1926. That notice, therefore, does not constitute the basis of this appeal, and it being before us only in support of a motion to increase the deficiency, does not carry with it a presumption of correctness.

By his motion to increase the deficiency appealed from the respondent introduces into this proceeding new issues, to wit: Error with respect to partnership income and foreign interest, and in respect of such issues the burden of proof is on him.

As before stated, in support of the motion to increase the deficiency appealed from, the respondent offered in evidence the deficiency notice of December 23, 1926, together with a revenue agent’s report showing certain findings in regard to petitioner’s partnership income and foreign interest. These documents were permitted to go into the record, subject to a ruling upon a consideration of the case as to their competency as evidence. In our opinion, these documents are not competent proof of the facts asserted by the respondent and, consequently, we decline to increase the deficiency from $465.47 to $686.35.

Reviewed by the Board.

The deficiency for 19%J¡. is $465.fl. Judgment will be entered accordingly.