Steiner Mfg. Co. v. Commissioner , 18 B.T.A. 740 ( 1930 )

STEINER MANUFACTURING CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Steiner Mfg. Co. v. Commissioner

Docket No. 22371.

United States Board of Tax Appeals

18 B.T.A. 740; 1930 BTA LEXIS 2602;

January 10, 1930, Promulgated

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A consent in writing entered into between the parties after the period of limitation had expired and subsequently to the passage of the Revenue Act of 1926 is ineffective, since section 1106 of that act extinguished both the right and the remedy.

W. M. Smith, Esq., for the petitioner.

Bruce A. Low, Esq., for the respondent.

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MORRIS

This proceeding is for the redetermination of a deficiency in income and profits taxes of $356.61 for the calendar year 1921 and the sole question presented for determination is whether the period of limitation as provided in section 277(a)(2) of the Revenue Act of 1926 has expired with respect thereto.

FINDINGS OF FACT.

The petitioner is a corporation organized and incorporated under the laws of the State of Missouri.

The petitioner filed its corporation income and profits-tax return for the calendar year 1921 on or before March 15, 1922, and paid the amount of tax shown thereby, to wit, $23,996.24.

Under date of June 7, 1926, the respondent advised the petitioner that the period provided in section 284(b)(1) of the Revenue Act of 1926 had expired, and the overassessment was barred, unless as provided in section 284(g) a waiver "is received on or before June 15, 1926." In accordance therewith the petitioner and the respondent entered into the following consent in writing under date of June 10, 1926:

In pursuance of the provisions of existing Internal Revenue Laws Steiner Manufacturing Company, a taxpayer of St. Louis, Missouri, and the Commissioner of Internal Revenue hereby waive the time prescribed by law for making any assessment of the amount of income, excess profits, or war-profits taxes due under any return made by or on behalf of said taxpayer for the year (or years) 1921 under existing revenue acts, or under prior revenue acts.

This waiver of the time for making any assessment as aforesaid shall remain in effect until December 31, 1926, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days, or (2) if an appeal is filed with said Board then said date shall be extended by the number of days between the date of mailing of said notice of deficiency and the date of final decision by said Board.

Under date of September 8, 1926, the petitioner received a letter from the respondent denying it relief under the provisions of sections 327 and 328 of the Revenue Act of 1921, and at the same time indicating a total tax of $24,352.85, or a deficiency of $356.61.

A deficiency letter was mailed to the petitioner under date of December 9, 1926, showing a deficiency in tax for 1921 of $356.61 and the petitioner filed its petition therefrom with this Board on January 6, 1927.

OPINION.

MORRIS: Section 277(a)(2) of the Revenue Act of 1926 provides that "the amount of income, excess-profits, and war-profits taxes imposed by the Revenue Act of 1921, and by such Act as amended, for the taxable year 1921 * * * shall be assessed within four years after the return was filed * * *."

The petitioner filed its return for 1921 on or before March 15, 1922. Therefore, the four-year period prescribed in section 277 above expired on or beforeMarch 15, 1926. Under date of June 10, 1926, subsequent to the passage of the Revenue Act of 1926 and after the four-year period of limitation had expired, the parties entered into a consent in writing for a later assessment of the proposed deficiency for 1921.

The aforesaid consent was ineffective to extend the period of limitation because at the time entered into both the right and the remedy had been extinguished by the enactment of section 1106 of the Revenue Act of 1926, , and , and the repeal of that section by section 612 of the Revenue Act of 1928 "did not revive a dead liability or create a new obligation." .

Judgment will be entered for the petitioner.