Paso Robles Mercantile Co. v. Commissioner

*415 In this proceeding the petitioner seeks a redetermination of its liability for income taxes for its fiscal year ending January 31, 1923, for which year the respondent has determined that there is a deficiency in the amount of $2,789.42. The facts were stipulated. The petitioner filed its returns and paid its tax on the calendar year basis. Subsequently, its method of reporting was changed to the fiscal year basis. In computing the tax due and unpaid for the fiscal year ending January 31, 1923, the respondent has refused to give the petitioner credit for any part of the amount paid as tax due for the calendar year 1922, in accordance with the return originally filed on the calendar year basis.

FINDINGS OF FACT.

It is hereby stipulated and agreed by and between the parties of the above-entitled appeal, through their respective counsel, as follows:

That the Paso Robles Mercantile Co., hereinafter called the petitioner, is a California corporation, with its principal place of business at Paso Robles, Calif.

That the deficiency taxes in controversy*2058 are income taxes for the fiscal year ended January 31, 1923, and the amount of such deficiency in tax alleged to be due for said period is the sum of $2,789.42.

That on March 9, 1923, the petitioner filed its income-tax return for the calendar year 1922, with the collector of internal revenue for the sixth district of California, showing a tax due of $2,813.22.

That for the fiscal year ended January 31, 1919, and prior thereto the petitioner kept its books and filed its returns on the basis of a fiscal year ended January 31. Without obtaining permission from the Commissioner of Internal Revenue, the petitioner altered its accounting period to a calendar year and filed returns for the fiscal period ended December 31, 1919, and for the calendar years 1920, 1921, and 1922.

That the petitioner, having been instructed during 1924 by the collector of internal revenue to prepare and file amended returns for the fiscal years ended January 31, 1920, 1921, 1922, and 1923, restated its books and filed the required returns. No return was filed by the petitioner for the calendar year 1923, but on January 31, 1924, the books were closed and a return filed for the fiscal year ended January 31, 1924.

*2059 *416 That on March 9, 1927, the Commissioner of Internal Revenue transmitted by registered mail to the petitioner a 60-day letter indicating a deficiency in tax for the fiscal year ended January 31, 1923 in the amount of $2,789.42.

That in determining the tax liability of the petitioner for the fiscal year ended January 31, 1922, the Commissioner credited against the total tax assessable for the fiscal year ended January 31, 1922, the total tax assessed for the calendar year 1922.

That the Commissioner failed to give the petitioner credit in said 60-day letter for the year ended January 31, 1923, for the proportionate part of the tax paid by the petitioner on its return for the calendar year 1922, namely, eleven-twelfths of $2,813.22.

That on the records of the collector of internal revenue for the sixth district of California there appear the following assessments and the amounts paid for the calendar year 1922:

1922 Tax. Account No. 402179 - 1923 List.

Assessed $2,813.22 Paid $703.31 - 3/9

Paid 703.31 - 6/14

Paid 703.30 - 9/14

Paid 703.30 - 12/13

That the Commissioner determined a deficiency for the fiscal year ended January 31, 1923, as follows: *2060

OPINION.

GREEN: The same parties in , presented to us the identical issue here raised and we there held that "a tax erroneously determined on a calendar year basis should be credited on the tax shown due on a fiscal year basis in proportion to the months in the respective calendar years making up the fiscal year." We find no occasion to alter the opinion there expressed.

Judgment will be entered under Rule 50.