Lang Body Co. v. Commissioner , 17 B.T.A. 245 ( 1929 )

LANG BODY CO. OF DELAWARE, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Lang Body Co. v. Commissioner

Docket No. 35802.

United States Board of Tax Appeals

17 B.T.A. 245; 1929 BTA LEXIS 2329;

September 13, 1929, Promulgated

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Assessment and collection of a deficiency in respect of the tax of an Ohio corporation from the petitioner, a transferee of the assets of such Ohio corporation, held not barred by the statute of limitation.

James H. J. Sykes, Esq., Jacob S. Baruch, Esq., and Robert Hardison, Esq., for the petitioner.

John D. Foley, Esq., for the respondent.

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LITTLETON

On December 29, 1927, the Commissioner mailed to the petitioner, a transferee of the assets of the Lang Body Co. of Ohio, a notice of his determination of the petitioner's liability under section 280 of the Revenue Act of 1926 for the amount of $57,310.66, representing a deficiency in respect of the income and profits tax of the Lang Body Co. of Ohio for the calendar year 1918. The only question in this proceeding is whether the statute operates to bar assessment and collection of the deficiency of the Ohio corporation from this petitioner. The petitioner admits that it is a transferee of the assets of the Ohio corporation and that it is liable for the amount claimed if the statute has not barred assessment and collection.

FINDINGS OF FACT.

Petitioner is a Delaware corporation with principal office and place of business at Cleveland, Ohio. On or about August 31, 1919, it succeeded to the assets of the Lang Body Co., an Ohio corporation, and continued the business theretofore carried on by the Ohio corporation with the same plant and the same office.

The Ohio corporation has not been formally dissolved, but on March 31, 1923, the Secretary of State of Ohio notified the Lang Body Co. of Ohio that in accordance with section 5509 of the General Code of Ohio he had made an entry on the margin of his record canceling the articles of incorporation as of March 1, 1923. This action was taken by the Secretary of State of Ohio as a result of the failure of the Lang Body Co. of Ohio to make an excise-tax report.

The Lang Body Co., an Ohio corporation, filed its income and profits-tax return for the calendar year 1918 on May 26, 1919. On February 12, 1924, the Ohio corporation and the Commissioner of Internal Revenue executed a consent in writing whereby the Commissioner might determine, assess and collect any income and profits tax which might be found to be due for the year 1918 within one year from February 12, 1924. This consent was executed by the Lang Body Co., an Ohio corporation, by Charles E. J. Lang, president. On June 18, 1924, another consent in writing was executed by the Lang Body Co., an Ohio corporation, and the Commissioner of Internal Revenue, which consent provided that it should be "in effect from the date it is signed by the taxpayer and will remain in effect for a period of one year after the expiration of the statutory period of limitation, or the statutory period of limitation as extended by any waivers already on file with the Bureau." These consents extended the period of limitation in respect of the tax liability of the Lang Body Co., an Ohio corporation, to February 12, 1926, inclusive.

On February 9, 1926, the Commissioner made his determination in respect of the income and profits tax of the Lang Body Co. of 3088 West 106th Street, Cleveland, Ohio, for the calendar year 1918 and for the period January 1, 1919, to August 31, 1919, the latter date being the date on which the petitioner, as transferee, took over the assets of the Lang Body Co. of Ohio, which determination showed a deficiency in respect of the tax of the Ohio corporation of $57,310.66 for the calendar year 1918 and no deficiency for the period January 1 to August 31, 1919, and, on the same date, mailed a notice, as required by law, of this determination to the Lang Body Co. at the address above stated.

On the same date, to wit, February 9, 1926, the Commissioner made an examination of the tax returns of the Lang Body Co. of Delaware, whose address is 3088 West 106th Street, Cleveland, Ohio, and made an audit of its books of account and records for its taxable periods August 31, 1919, to December 31, 1919, and the calendar years 1920 and 1921. On that date he mailed the Lang Body Co. of Delaware a statutory notice of his determination in respect of its tax liability for those periods, as set forth in the report and determination of the Board promulgated May 27, 1929, and reported in .

A joint petition was filed with the Board by the Lang Body Co. of Ohio and the Lang Body Co. of Delaware within the time allowed by law, asking a redetermination by the Board of the deficiencies determined by the Commissioner in respect of the Ohio corporation for 1918 and the Delaware corporation for the period ending December 31, 1919, and for the calendar years 1920 and 1921.

The proceeding instituted by the Lang Body Co. of Ohio in respect of the Commissioner's determination of a deficiency against it for the year 1918, such proceeding being Docket No. 15087, is still pending before the Board and has not yet been decided upon the merits.

OPINION.

LITTLETON: At the hearing of this proceeding counsel for the petitioner stated:

The only question involved * * * is the statute of limitation; we admit we are the transferee of The Lang Body Company of Ohio; we admit we were liable for the tax at the time, and the only matter involved is the statute of limitations, and I have told Mr. Foley that all these things we would agree to when we get before the Board, and I will state that to your Honor, that we are bound by this tax if we are liable under the law, and we further admit that at the time we took over the Lang Body Company of Ohio, that the assets were four, five or six times what the tax amounted to and there is no question about our liability if the statute has not run * * *.

In the case of the Lang Body Co., Docket No. 15087, the Board on May 27, 1929, promulgated its report and determination holding that the claim of the Lang Body Co., anOhio corporation, which transferred its assets to this petitioner on or about August 31, 1919, that it had not instituted a proceeding before the Board upon the Commissioner's deficiency notice mailed February 9, 1926, was not well taken; that the Ohio corporation did file a petition with the Board and that the Board had jurisdiction thereof. See . In view of that determination the statute of limitation in respect of the tax liability of the Lang Body Co. of Ohio has not yet expired for the reason that the Commissioner mailed to that corporation a deficiency notice within the period of limitation as fixed by the waiver executed by that company. Since the statutory period for assessment of the tax against the taxpayer has not expired, it has not operated to bar assessment and collection of the deficiency in respect of the tax of the Ohio corporation, the taxpayer, from the petitioner as transferee under the provisions of section 280 of the Revenue Act of 1926, which provides that "the period of limitation for assessment of any such liability of a transferee or fiduciary shall be * * * one year after the expiration of the period of limitation for assessment against the taxpayer."

Reviewed by the Board.

Judgment will be entered for the respondent.