Lamborn v. Commissioner , 13 B.T.A. 177 ( 1928 )

ARTHUR H. LAMBORN, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

GEORGE H. LOGAN, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

HENRY B. HUTCHINGS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

GERARD P. TAMELING, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

CHARLES C. RIGGS, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

NELSON N. KEEN, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

B. WHEELER DYER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Lamborn v. Commissioner

Docket Nos. 9346, 9062, 10691, 11633-11636.

United States Board of Tax Appeals

13 B.T.A. 177; 1928 BTA LEXIS 3294;

August 2, 1928, Promulgated

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1. A corporation dissolved in 1918 and distributed to its stockholders in that year profits earned during 1917. Held that the amount of the distribution received by each stockholder constituted taxable income of such stockholder for 1918.

2. In 1918 the petitioners received a ruling from the then Commissioner that "where a corporation dissolves and distributes its assets in kind, and not in cash, no taxable income is received from the transaction by its stockholders." Held that such a ruling is not binding upon a subsequent Commissioner and that he may determine that the distribution received by each stockholder in 1918 constitutes taxable income to such stockholder.

3. The distributions received by the petitioners in 1918 were subject to normal tax.

4. Since more than six years elapsed from the date of the assessment of the tax claimed to be due from A. H. Lamborn to the date of the notice of deficiency and no agreement in writing was entered into by the Commissioner and the taxpayer for the extension of such period and no attempt was made to collect the tax by distraint or by a proceeding in court within the six-year period, the collection of the tax is barred by the statute of limitations.

5. Since additional assessments of tax were made against the other six petitioners within the period prescribed by the statute of limitations as extended by legal consents the collection of the deficiencies determined against such petitioners is not barred by the statute of limitations.

Wm. R. Conklin, Esq., and Edward S. Bentley, Esq., for the petitioners.

J. W. Fisher, Esq., for the respondent.

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SMITH

These proceedings are for the redetermination of deficiencies in income tax for 1918 as follows:

Arthur H. Lamborn	$83,713.58
George H. Logan	3,938.24
Henry B. Hutchings	9,989.70
Gerard P. Tameling	6,541.64
Charles C. Riggs	10,004.14
N. Nelson Keen	3,881.81
B. Wheeler Dyer	4,093.85

The principal points in issue are:

(1) Whether the petitioners derived taxable income from the dissolution of a corporation in 1918 of which they were stockholders, the assets of such corporation passing to trustees in dissolution, and then, by agreement of the stockholders of the corporation, being paid into a partnership for the continuation of the business carried on by the dissolved corporation.

(2) Whether the respondent is precluded from holding that the petitioners derived taxable income from the distribution of the assets of a corporation dissolved in 1918 in the light of the fact that counsel for the petitioners received a ruling from the then Commissioner in 1918 that "where a corporation dissolves and distributes its assets in kind and not in cash not taxable income is received from the transaction by its stockholders."

(3) Whether the distributions received by the petitioner in 1918 are subject to normal tax.

(4) Whether the collection of the deficiencies determined by the respondent is barred by the statute of limitations.

FINDINGS OF FACT.

1. During the calendar year 1917, The A. H. Lamborn Co. was a New Jersey corporation. The stock of the company was held by 11 persons, including the 7 petitioners.

2. The corporation was taxed for the year 1917 under section 209 of the Revenue Act of 1917.

3. The A. H. Lamborn Co. ceased doing business on or about December 31, 1917. At that time it held surplus and undivided profits earned during the year 1917 amounting to $326,135.17 over and above all liabilities. Between January 1 and March 30, 1918, the corporation did no business except that incidental to liquidation and during that period suffered a loss of $800.22 so that the amount of surplus and undivided profits on March 30, 1918, was $325,334.95, all representing profits earned during the calendar year 1917.

4. On March 11, 1918, the A. H. Lamborn Co. was dissolved and its assets passed to trustees in dissolution.

5. On March 30, 1918, the 11 stockholders of the A. H. Lamborn Co., including the 7 petitioners herein, formed a partnership known as Lamborn & Co. On that day all the assets and undivided profits of the A. H. Lamborn Co., amounting to $325,334.95, were transferred, conveyed and set over by the trustees in dissolution of The A. H. Lamborn Co. to the partnership of Lamborn & Co. and the amount thereof then and thereafter was deemed capital contributed by the respective stockholders in proportion to the number of shares of stock held by them respectively in the A. H. Lamborn Co.

6. The business of The A. H. Lamborn Co. was that of brokers and dealers in raw and refined sugar. The identical business was continued by the partnership of Lamborn & Co., who used the same offices, the same corresponding brokers, and the same employees. No change was made in the conduct of the business except that necessarily resulting from the change from the corporate to the partnership form.

7. On March 15, 1919, each of the seven petitioners herein filed a tentative return on Form 1040T of their income for the calendar year 1918 and paid one-fourth of the amount of income tax estimated on such returns.

8. The amounts of estimated tax and the amounts paid upon the filing of the returns were as follows:

Date	Name	Estimated tax	Amount paid
Sept. 19	Arthur H. Lamborn	$160,000	$40,000
Sept. 19	Charles C. Riggs	7,000	1,750
Sept. 19	Gerard P. Tameling	7,000	1,750
Sept. 19	Henry P. Hutchings	7,000	1,750
Sept. 27	B. Wheeler Dyer	3,400	850
Sept. 27	N. Nelson Keen	3,600	900
Sept. 27	George H. Logan	3,600	900

The amounts of tax shown to be due by the tentative returns were assessed against Arthur H. Lamborn, Charles C. Riggs, Gerard P. Tameling, and Henry P. Hutchings on September 19, 1919, and against B. Wheeler Dyer, N. Nelson Keen, and George H. Logan on September 27, 1919, and the amounts paid upon the filing of such tentative returns were shown as a credit against the estimated tax.

9. On May 31, 1919, The A. H. Lamborn & Co.'s tax counsel addressed a letter to the Commissioner reading as follows:

A corporation which we represent was formally dissolved in conformity with the laws of the State of New Jersey in which State the corporation had been organized, on March 11, 1918, and on March 30, 1918, all of the stockholders of the said corporation formed a co-partnership under the same name as the corporation, in fact the partnership is simply the successor to the corporation. On the same day that the partnership was formed, the trustees in dissolution of the corporation transferred to the new partnership all the assets of the corporation, which assets were received by the partnership as a capital contribution by the stockholders of the corporation. These assets consisted almost entirely of the income which had been earned by the corporation in 1917, as the corporation had no surplus of assets over liabilities on Jan. 1, 1917, and had earned but a few thousand dollars during the time it was carrying on business in 1918. In August, 1918, the corporation filed its corporation undistributed net income returns showing that all of its assets, including earnings and remaining income of the year 1917, were finally distributed and transferred to the stockholders within the six months following the end of year 1917.

The question upon which the members of the new partnership wish to obtain your ruling is, whether in preparing their individual income tax returns for the year 1918, each of them must return as a part of his income his proportionate share of the corporation's assets transferred to the new co-partnership as a capital contribution and to what extent.

Your early response will be very much appreciated.

10. Under date of June 9, 1919, the Commissioner's office answered such letter over the signature of the assistant to the Commissioner by P. S. Talbert, head of division, saying in part as follows:

In this connection you are advised that under Sections 201 and 202 of the Revenue Act of 1918 this office holds that where a corporation dissolves and distributes its assets in kind and not in cash no taxable income is received from the transaction by its stockholders, because they merely exchanged an indirect interest for a direct interest in the same property. However, where such assets are distributed in cash, the amounts so distributed whether or not including any surplus earned since February 28, 1913, are to be regarded as payments for the stock of the dissolved corporation. Any excess so received over the cost of this stock to the stockholders, or over its fair market value as of Mach 1, 1913, if acquired prior thereto, is a taxable profit (Regulations 45, Articles 1548 and 1566).

Therefore whether any portion of the assets of the corporation transferred to the partnership is taxable to the individual members of the partnership depends upon whether such assets were distributed in cash or in assets in kind. If such assets were distributed in cash they are taxable to the stockholders to the extent provided in Article 1548 of the regulations. It is to be understood, of course, that the fact that the assets of the corporation distributed to the stockholders were in turn contributed to the partnership as capital does not affect the taxability of such assets in the hands of the stockholders if the assets were distributed to them in cash.

11. Following the receipt of this letter the petitioners prepared their completed returns and filed them on June 16, 1919, with the collector for the second district of New York and on the same date paid to the collector the difference between the amount shown by their respective returns and the amounts theretofore paid upon filing their tentative returns. The amounts shown by the completed returns and the amounts paid upon the filing thereof on June 16, 1919, were as follows:

Name of taxpayer	Amount shown by completed returns	Amount paid on
		filing final returns
Arthur H. Lamborn	$64,750.39	$24,750.39
Charles C. Riggs	3,406.04	1,656.04
Gerard P. Tameling	3,397.74	1,647.74
Henry P. Hutchings	3,483.44	1,733.44
B. Wheeler Dyer	1,716.49	866.49
N. Nelson Keen	1,079.79	179.79
George H. Logan	1,173.02	273.02

After the petitioners filed their completed returns the collector recommended to the Commissioner that the excess amounts of tax shown to be due by the tentative return over the amounts shown to be due by the completed returns be abated. The Commissioner accepted the recommendation of the collector with respect to all of the appellants except Lamborn. The unpaid balance of $95,249.61 standing against Lamborn was not abated.

12. In the returns so filed no statement was made with respect to the distribution of the capital assets of the The A. H. Lamborn Co., nor were any facts or figures furnished which could form the basis for any calculation or approximation of the amount of such distribution or of any possible tax thereon.

13. The alleged additional taxes for the year 1918 sought to be imposed upon the petitioners by reason of the distribution of the capital assets of The A. H. Lamborn Co. have never been paid or collected by distraint or otherwise and no suit or proceeding has been at any time commenced for the collection thereof.

14. On January 3, 1921, the collector sent A. H. Lamborn a claim in abatement on Form 47 in the sum of $95,249.61 and requested him to execute and return the same to him "in order to adjust the accounts in this office and to eliminate the excess assessment from your account for the taxable year 1918." Lamborn did not at that time execute such claim in abatement.

15. On November 20, 1922, the collector wrote to A. H. Lamborn stating that his office held a warrant of distraint against him in the sum of $95,249.61 and requesting payment at as early a date as possible.

16. Upon receipt of this letter the comptroller of Lamborn & Co. called on the collector personally. The collector sent for the files in the case and, after an examination of them, told the comptroller that Lamborn need give the matter no further consideration.

17. On or about January 29, 1924, Lamborn received a tax bill for an alleged balance due of $95,249.61 for income tax for 1918.

18. On or about February 2, 1924, the respondent sent Lamborn a 30-day letter proposing an additional tax liability of $83,713.58.

19. Lamborn then filed a claim in abatement in respect of the alleged tax shown in the tax bill ($95,249.61) and filed an appeal to the Commissioner from the alleged additional tax liability referred to in the 30-day letter.

This claim in abatement was acted upon by the Commissioner in 1925 and the claim was allowed for $11,536.03. A certificate of overassessment against Lamborn of this amount was received in the collector's office on November 14, 1925.

20. On or about February 19, 1924, Lamborn filed with the Commissioner a paper dated February 9, 1924, entitled "Income and Profits Tax Waiver," reading as follows:

In pursuance of the provisions of subdivision (d) of Section 250 of the Revenue Act of 1921 ARTHUR H. LAMBORN of Upper Montclair, N.J., 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 the said taxpayer, for the years 1918 under the Revenue Act of 1921, or under prior income, excess-profits, or war-profits 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. This waiver is 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, within which assessments of taxes may be made for the year or years mentioned.

ARTHUR H. LAMBORN, Taxpayer.

Approved Feb. 21, 1924.

D. H. BLAIR, Commissioner.

Examined and found acceptance.

F.A.G.

COMMISSIONER OF INTERNAL REVENUE.

S.H.

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 may be affixed.

21. On or about June 19, 1924, Lamborn's appeal was transmitted to the Committee on Appeals and Review, a committee of the respondent's office.

22. On or about February 19, 1925, the Solicitor of Internal Revenue recommended an affirmance of the findings of the Income Tax Unit but Lamborn was never notified of this decision. Pursuant thereto a jeopardy assessment was made by the Commissioner against Lamborn on March 10, 1925, of $83,713.58.

23. On or about March 13, 1925, Lamborn received another tax bill for $83,713.58 containing the following notation:

MAR 15 P SPL NO 7 - 1925 List SEC 274 D 1918 WAIVER 301821 RAR 83713 58

24. On March 31, 1925, the respondent canceled and eliminated the jeopardy assessment which formed the basis of the last-mentioned tax bill and signed and filed a so-called certificate to such effect. This abatement was made as a result of a protest against the assessment filed by Lamborn.

25. Lamborn was never notified of this circumstance and in ignorance thereof filed on or about May 7, 1925, a claim in abatement of the sum of $83,713.58, with a surety bond in the sum of $100,456.30. This bond was returned by the collector to Lamborn under date of August 26, 1925, together with a letter authorizing the surety company to release the same.

26. On October 19, 1925, the respondent wrote to Lamborn that the determination of the former Commissioner made on June 9, 1919, had been reversed and averred that Lamborn's correct tax liability for 1918 was $148,463.97. He added that since $160,000 had been assessed, Lamborn was entitled to an abatement to the extent of $11,536.03.

27. From this letter of October 19, 1925, Lamborn appealed to this Board.

28. On or about December 2, 1925, Lamborn, in the belief that a valid assessment stood against him in the amount of $83,713.58, filed with the collector an "agreement for security for payment of tax, etc." This agreement evidenced as follows:

THE BANK OF THE MANHATTAN COMPANY, by JOHN S. BAKER, one of its Vice-Presidents and W. A. RUSH, one of its Cashiers, its duly authorized officers, does hereby certify that there has been deposited with it by ARTHUR H. LAMBORN, ONE HUNDRED THOUSAND ($100,000) Dollars par value of Liberty Loan Bonds, which bonds the said Bank of the Manhattan Company undertakes and agrees to hold for the benefit of the Collector of Internal Revenue of the Second District of New York, to assure him of the payment by the said Arthur H. Lamborn, of such taxes, interest and penalties as may be demanded from the said Arthur H. Lamborn, should the appeal of the said taxpayer, Arthur H. Lamborn to the United States Board of Tax Appeals from the deficiency of $83,713.58 determined by the Bureau to be due for the year 1918, be denied in whole or in part, or further should the United States Board of Tax Appeals decide that it has no jurisdiction in the premises. In the event that the Board of Tax Appeals decides that it has no jurisdiction in the premises, or in the further event that it decides adversely to the taxpayer, and the said Arthur H. Lamborn neglects or refuses to make such payment when demanded by the Collector of Internal Revenue, and said Bank of the Manhattan Company undertakes and agrees to deliver to the Collector of Internal Revenue at the Custom House, New York City, the above mentioned bonds upon demand therefor by the said Collector of Internal Revenue of the Second District of New York, which the said Arthur H. Lamborn authorizes and directs said Bank so to deliver. All, however, without prejudice to the right of the taxpayer, Arthur H. Lamborn, to bring suit to recover the said tax, interest and penalties so paid by the delivery of said bonds or by the taxpayer as the case may be, or any part thereof, in the event that said Board of Tax Appeals decides it has no jurisdiction in the premises or decides adversely to the said taxpayer in whole or in part, it being understood and agreed, however, that all interest on said bonds accrued or accruing thereon during the time of their deposit shall be paid over to and received by the said taxpayer.

29. On or about February 19, 1924, the other six petitioners filed consents extending the time for the making of additional assessments against them identical or substantially identical to the consent filed by Arthur H. Lamborn. These consents extended the time within which the Commissioner might make assessments against the petitioners to June 15, 1925.

30. On March 6, 1925, the Commissioner made additional assessments as follows:

George H. Logan	$3,938.24
Henry B. Hutchings	9,989.70
George P. Tameling	6,541.64
Charles C. Riggs	10,004.14
N. Nelson Keen	3,881.81
B. Wheeler Dyer	4,093.85

31. Under date of March 10, 1925, the Collector for the Second District of New York sent notices to the above-named six petitioners of assessments against them in the amounts indicated above.

32. On or about March 20, 1925, Hutchings, Tameling, and Riggs filed claims in abatement against the assessments and thereafter filed with the collector surety bonds in an amount exceeding the amount of the assessments for the purpose of protecting the collector in case the abatement claims were rejected by the Commissioner. The surety bonds were in the following amounts:

Hutchings	$11,987.64
Tameling	7,741.97
Riggs	12,004.97

33. The petitioners, Logan, Keen and Dyer, likewise filed abatement claims for the abatement of the assessments and on or about May 19, 1925, filed with the collector an indemnity bond with the Globe Indemnity Co., as surety thereon, these bonds being in the following amounts:

Logan	$4,725.89
Keen	4,658.17
Dyer	4,912.62

34. Under dates of September 14, 1925 and November 11, 1925, the respondent sent to Logan and Hutchings 60-day letters, informing them of the rejection of their abatement claims and advising them of their right to appeal to the Board of Tax Appeals from such denial of abatement claims and on December 10, 1925, the respondent sent to Tameling, Riggs, Keen and Dyer similar letters.

35. Appeals to this Board were duly taken from such deficiency letters.

OPINION.

SMITH: 1. At the hearing of these appeals, counsel for the respondent denied that the Board had jurisdiction of these proceedings upon the ground that the respondent was not proposing to make assessments against the petitioners but that he had only made adjudications of claims in abatement filed by him. In his brief subsequently filed the respondent did not raise the question of the jurisdiction of the Board.

Section 283(f) of the Revenue Act of 1926 clearly gives the Board jurisdiction.

2. It will be unnecessary to consider the specific amounts of income derived by the petitioners from the dissolution of The A. H. Lamborn & Co. as a result of the vesting in the petitioners of pro rata portions of the net assets of the dissolved corporation for the reason that it was stipulated at the hearing that if the Board should hold that the transfer of the assets from the corporation to the partnership which occurred on or about March 30, 1918, resulted in taxable income to the petitioners, the amount of such income was correctly computed by the Commissioner. It is necessary to consider, therefore, only whether the transaction in question gave rise to taxable income.

On this point the respondent relies on the following Board decisions: ; ; ; ; ; .

In all of these cases the Board held that where a corporation was dissolved and the assets were transferred to the stockholders, the stockholders derived income to the extent of the fair value of the assets received in excess of cost if acquired subsequent to February 28, 1913, and if before in excess of cost or March 1, 1913, value, of the shares of stock owned by such stockholders, whichever was higher. In line with those decisions it must be held that the petitioners derived taxable income from the distribution to them of the profit to The A. H. Lamborn Co. earned during 1917 and received by them during 1918. It is immaterial that for 1917 the corporation was assessed under section 209 of the Revenue Act of 1917.

3. It is contended by the petitioners that a former Commissioner, in 1918, made a decision to the effect that the petitioners derived no taxable income from the transaction here in question and that the present Commissioner has no authority to change that decision. Upon this point it is to be noted that the then Commissioner made a ruling in a hypothetical case. Counsel for the petitioners did not inform the then Commissioner of the name of the company which he had in mind. It was represented that the assets were distributed "in kind." The evidence indicates, however, that what was distributed to the stockholders in 1918 was the profits which were earned during 1917. The extent to which the profits had been reduced to cash by March 30, 1918, is not disclosed by the evidence. We are not persuaded that the ruling made by the former Commissioner covered the precise facts in the instant case. But if the ruling did precisely cover the case we are of the opinion that the present Commissioner is not bound by such a decision in the determination of deficiencies against the petitioners. The facts herein stated are substantially the same as those which obtained in , in which we held that a letter sent by the Commissioner in 1916 to an attorney, advising him that a foreign corporation was, in his opinion, entitled to deduct from gross income in a tax return made under the Revenue Act of 1916, such portion of the income received from sources within the United States as represents "the actual commission for buying silk in Japan" is not such an interpretation of the statute as has any binding effect upon a successor Commissioner in determining true tax liability for the fiscal year ended June 30, 1917. See also ; ; .

4. The petitioners contend that in any event the respondent erred in holding the petitioners liable to normal tax in respect of the distribution of the earnings of the A. H. Lamborn & Co. for 1917 received by them in 1918. In support of their contention they cite the case of , decided by the Circuit Court of Appeals, Eighth Circuit, on May 18, 1927. This decision was, however, reversed by the United States Supreme Court on February 20, 1928, in . The contention of the respondent is accordingly sustained.

5. The main contention of the petitioners is that there are no valid assessments against the petitioners for the year 1918 and that the statute of limitations has operated to bar the respondent from making such assessments. The evidence upon this point is voluminous. The petitioners contend that the records of the Commissioner's office do not show valid assessments for the reason that as to one of the petitioners, A. H. Lamborn, the only assessment outstanding was made upon the basis of a tentative return and as to the others that the signature of the Commissioner has not been proven. We will first consider the case of A. H. Lamborn.

The records of the Commissioner's office show an assessment against Lamborn of $160,000 less $40,000 paid upon the filing of the return, which assessment was made on September 19, 1919. In the first place, it is contended that an assessment can not be made on the basis of a tentative return for the reason that a tentative return is not a return required by the statute. ; ; . In , we said:

We express no opinion as to whether or not the assessment made against the petitioner, in the amount of $40,000, on the basis of its tentative return, and the assessment of the entire consolidated tax liability against the Henderson Estate Co., were proper assessments; * * *

In the instant proceedings we also think it is unnecessary to express an opinion upon this point. After Lamborn filed a completed return for 1918 on June 16, 1919, the collector recommended to the Commissioner that $95,249.61 of the tax assessed against Lamborn be abated, inasmuch as it appeared that the tax legally due from him was only $64,750.39, all of which had been paid. The records introduced in evidence were explained by a witness for the respondent as meaning that the respondent had rejected the recommendation of the collector and had allowed the unpaid balance of $95,249.61 to stand against Lamborn until his claim for the abatement of the assessment of $95,249.61 had been acted upon by the respondent; that when action was taken upon that claim a certificate for an overassessment (No. 596,375) was allowed in the amount of $11,536.03. This certificate of overassessment was received in the collector's office on November 14, 1925. The records further show that an assessment of $83,713.58, the amount of tax claimed to be due from Arthur H. Lamborn in excess of the amount of tax already paid by him for 1918, was made under date of March 10, 1925; that as a result of a protest made by him this assessment was canceled on March 31, 1925. This leaves the only assessment outstanding against Lamborn as the unpaid and unabated balance of the assessment made on the basis of the tentative return which was made under date of September 19, 1919.

Arthur H. Lamborn's final return for 1918 was filed on June 16, 1919. Under section 277(a)(2) of the Revenue Act of 1921, the respondent was required to assess any tax due from him in respect of the year 1918 "within 5 years after the return was filed, and no proceeding in court for the collection of such taxes shall be begun after the expiration of such period." On or about February 19, 1924, Lamborn filed a consent with the respondent extending for one year the period within which an assessment could be made. Under this consent an additional assessment could have been made against Lamborn up to June 15, 1925.

Section 278(d) of the Revenue Act of 1926 provides:

Where the assessment of any income, excess-profits, or war-profits tax imposed by this title or by prior Act of Congress has been made (whether before or after the enactment of this Act) within the statutory period of limitation properly applicable thereto, such tax may be collected by distraint or by a proceeding in court (begun before or after the enactment of this Act), but only if begun (1) within six years after the assessment of the tax, or (2) prior to the expiration of any period for collection agreed upon in writing by the Commissioner and the taxpayer.

The only consent filed by Lamborn was that set out in the findings of fact which did not extend the period for the assessment or collection of the tax except "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, within which assessments of taxes may be made for the year or years mentioned." The completed return of Lamborn was filed on June 16, 1919. The consent did not extend the period for the assessment or collection of the tax beyond June 16, 1925. The respondent contends, however, that the action of Lamborn in filing a bond on or about May 7, 1925, with the collector in connection with his abatement claim for the abatement of an assessment, and his filing with the collector of an agreement with the Bank of the Manhattan Co. on or about December 2, 1925, or this series of transactions amounted to a consent on the part of Lamborn for the collection of the assessment after the statute of limitations had operated to bar collection. We think this position is untenable. The bond which was filed in connection with the abatement claim was immediately returned to the petitioner and the surety company was released from its obligation on the bond. The period of the statute of limitations operated prior to the filing with the collector of an agreement with the Bank of the Manhattan Co. on December 2, 1925. A perusal of this agreement shows that it was in the nature of an appeal bond. It was merely for the purpose of protecting the collector in case the Board of Tax Appeals should decide the issue against Lamborn and find that the tax was legally due. This was not a consent to a later determination of the tax. ; . The statute of limitations tolled in the case of Lamborn on September 18, 1925, six years having elapsed from the date of any outstanding assessment. No suit was ever instituted upon the basis of the bond which was filed and later canceled or upon the basis of the agreement with the Bank of the Manhattan Co. In view of these facts it must be held that there is no deficiency due from Lamborn.

The situation with respect to the other six petitioners is entirely different. They all filed on or about February 19, 1924, consents similar to that filed by Lamborn. Acting upon such consents the respondent on March 6, 1925, made assessments against them for the amounts of tax due from them for the year 1918 in excess of the amounts paid upon their returns filed on June 16, 1919. There is nothing in the record that proves or tends to prove that the assessments were not made by the Commissioner, the official charged with the duty of making the assessments. The respondent had six years from the date of the making of the assessments within which to collect the same. Section 278(d) of the Revenue Act of 1926.

Reviewed by the Board.

Judgment of no deficiency will be entered in the case of Lamborn, and judgment for the respondent will be entered in the cases of the other petitioners.