Hughes v. Commissioner

WALTER S. HUGHES, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Hughes v. Commissioner

Docket No. 16175.

United States Board of Tax Appeals

10 B.T.A. 1159; 1928 BTA LEXIS 3945;

March 5, 1928, Promulgated

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Payment of a jeopardy assessment prior to filing petition for redetermination does not deprive the Board of jurisdiction.

Kenneth Howes, Esq., for the petitioner.

Arthur H. Murray, Esq., for the respondent.

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ARUNDELL

On motion of respondent to dismiss for want of jurisdiction.

FINDINGS OF FACT.

By letter of February 12, 1926, respondent notified petitioner that in accordance with section 274(d) of the Revenue Act of 1924, an income and profits tax in the amount of $645.62 for the year 1921 had been assessed.

On or about March 30, 1926, petitioner received from the collector at Boston, Mass., a notice and demand for said tax together with interest in the amount of $155.92, and on April 2 or 3, 1926, petitioner paid to the collector said tax and interest in the aggregate amount of $801.54.

On April 12, 1926, respondent notified petitioner by letter that:

In accordance with the provisions of Section 279(a) of the Revenue Act of 1926, there has been assessed against you an income and profits tax amounting to $645.62 for the taxable year 1921, the details of which are set forth in the attached statement.

In accordance with the provisions of Section 274(a) of the same Act, you are allowed sixty days (not counting Sunday as the sixtieth day) from the date of the mailing of this letter within which to file a petition with the United States Board of Tax Appeals, contesting in whole or in part the correctness of this determination.

On May 20, 1926, petitioner filed a petition for redetermination of tax in the amount of $645.62.

OPINION.

ARUNDELL: The respondent determined a deficiency in respect of the tax of the petitioner and notified petitioner thereof. The petitioner seasonably and in due form filed a petition with the Board praying for a redetermination of the deficiency asserted. These facts, on their face, give us jurisdiction. But the respondent says that at the time the petition was filed there was no deficiency for us to review, the amount that at one time had been asserted as a deficiency having been assessed and paid in full. In , upon which respondent relies, we held that under the Revenue Act of 1924 an appeal from the determination of a deficiency lapsed upon payment of a jeopardy assessment made subsequent to the filing of the petition. The present case, however, arises under the Revenue Act of 1926, and by this Act changes were effected in both the jurisdiction of the Board and in the system of contesting deficiencies in the Bureau of Internal Revenue. An example of the change wrought in our jurisdiction is found in the case of , where, after filing a petition for redetermination, the petitioner paid the tax. We there held that under the 1926 Act jurisdiction is not lost by reason of the fact that after an appeal is taken the deficiency may be assessed and collected. Under the 1924 Act a taxpayer had the right to file a claim for abatement of an additional tax assessed. This he may not do under the 1926 Act. In lieu of the former method of contesting assessments by means of abatement claims, Congress has provided that a taxpayer may file a petition with the Board for a redetermination of the tax in dispute. Section 279 of the Revenue Act of 1926. That section was inserted by Senate Amendment 86, and the conference report with respect thereto contains the following explanation:

* * * The Senate amendment substitutes for the system of claims in abatement of the House bill a system of jeopardy assessments which does not interfere in any manner with the regular course of procedure of deficiency letters, petitions to the board, and review of the board's decision by the Circuit Court of Appeals. Upon the making of the jeopardy assessment, the taxpayer, if he so desires, may stay the collection of the tax by filing a bond. If he does not elect to file a bond, the Commissioner may collect the tax, but the right of the taxpayer to have the correct amount of the deficiency determined by the board and the appellate courts is not interfered with, and if in the course of such procedure it is decided that he has overpaid the tax a refund will be made to him. (Page 42, Conference Report, February 22, 1926.) (Italics supplied.)

This language, it seems to us, removes all doubt as to the intent of Congress to allow appeals in cases such as we have here.

The respondent's motion to dismiss is denied and the proceeding will be placed on the general calendar for hearing on the merits in due course.

An order will be entered accordingly.