Myles Salt Co. v. Commissioner

OPINION.

Smith:

The question presented by this proceeding is whether the deficiency in tax for the fiscal year ended February 28,1921, is barred by the statute of limitations. The respondent contends that it is not by reason of the fact that the petitioner never filed the income and profits-tax return required to be filed by the Revenue Act of 1921; that therefore four years have not elajosed from the date of the filing of the required return to the date of the deficiency notice, namely, September 17, 1926. In support of this proposition the respondent cites Updike v. United States, 8 Fed. (2d) 913; certiorari denied by Supreme Court, 271 U. S. 661; Davis Feed Co., 2 B. T. A. 616; Covert Gear Co., 4 B. T. A. 1025; John Wanamaker Philadelphia, 8 B. T. A. 864; M. Cohn & Sons Co., 9 B. T. A. 87; Fred T. Ley & Co., 9 B. T. A. 749; M. Brown & Co., 9 B. T. A. 753; Keystone Coal & Mining Co., 10 B. T. A. 295; Whitehouse Leather Products Co., 12 B. T. A. 714; Louisville Veneer Mills, 12 B. T. A. 1352; C. A. Lawton Co., 13 B. T. A. 8.

The petitioner, on the other hand, relies upon the proposition that it filed the required return on May 16, 1921, and that more than four years elapsed from that date to the date when the deficiency notice was mailed to it. In support of this proposition it cites Fred T. Ley & Co., supra; M. Brown & Co., supra; Farmers Elevator Co., 13 B. T. A. 1079; Farmers Cooperative Co., 13 B. T. A. 1080.

In John Wanamaker Philadelphia, supra, we stated;

* * * The Revenue Act of 1921 clearly required all corporations having a fiscal year ending during the calendar year 1921 to file a return in accordance with the provisions of that Act. Treasury Decision 3305 inferentially relieved taxpayers who or which had filed returns for a fiscal year ended in 1921 under the provisions of the Revenue Act of 1918 from filing second returns under the provisions of the Revenue Act of 1921, provided such second returns would not show any additional tax payable. Treasury Decision 3310 clearly required the filing of such return where an additional tax was payable * * *.

The decisions of the Board have been consistent with respect to this proposition.

By reason of a change in the law effected by the Revenue Act of 1921, the petitioner had a greater liability for tax for the fiscal year ended February 28, 1921, than it had under the provisions of the Revenue Act of 1918. Upon its return of gross income and deductions therefrom it had a greater liability under the later act than it had under the former. It was therefore required to file a return under the provisions of the later act. This it failed to do.

All of the cases relied upon by the petitioner in support of the operation of the statute of limitations and cited above involve cases where the Revenue Act of 1921 did not impose any greater tax liability than was imposed by the Revenue Act of 1918. Thus, in Fred T. Ley & Co., supra, we stated in the syllabus:

* * * Petitioner was not liable for an additional tax for sucb taxable year [fiscal year ended February 28, 1921] after the enactment of the Revenue Act of 1921 by reason of any change in the law. * * *

We therefore held that it was not required by the regulations of the Commissioner to file a return under the provisions of the Revenue Act of 1921. The same conditions obtained in all of the other cases cited by the petitioner.

Since admittedly the petitioner had a greater tax liability under the Revenue Act of 1921 for the fiscal year ended February 28, 1921, than it had under the Revenue Act of 1918 for the same fiscal year, and since it filed no return as required by the Revenue Act of 1921 and the regulations of the Commissioner thereunder, we are of the opinion that the statute of limitations has not operated to bar the assessment and collection of the deficiency determined by the respondent in the amount of $13,848.22.

Reviewed by the Board.

Judgment will be entered for the respondent.