James & Holmstrom Piano Co. v. Commissioner
Opinion
*2426 Under section 278(e) of the Revenue Act of 1926 a collection waiver executed after the effective date of that Act is without effect where the collection was barred prior to the enactment of the 1926 Act.
*322 This is a proceeding for the redetermination of a deficiency in income and profits taxes for the calendar year 1917 in the amount of $571.29. The only issue presented is whether the collection of the deficiency is barred by the statute of limitations. The facts were stipulated as follows:
FINDINGS OF FACT.
The petitioner is a corporation organized under the laws of the State of New York and is engaged in the business of manufacturing and selling pianos and other musical instruments. Its principal office is located in New York City.
*323 The petitioner filed its separate income and profits-tax return for the calendar year 1917 on Forms 1031 and 1103 with the collector of internal revenue at New York City on May 2, 1918, the time for filing such return having been extended to that date by proper authority. *2427 Upon the basis of the return tax was assessed and paid in the amount of $697.14. On June 15, 1922, an amended consolidated return was filed by the petitioner and certain other companies with which affiliation was claimed. No assessment was made on this later return and the affiliation claimed was not accepted by the Department.
On March 7, 1923, the Commissioner advised the petitioner that an additional tax for the year 1917 in the amount of $571.29 would be assessed, but that a claim for abatement thereof would be entertained if an appeal were filed within 30 days from the date of the receipt by the petitioner of the Commissioner's letter. such additional tax was assessed in the March, 1923, assessment list. On March 26, 1923, the petitioner filed a claim for abatement of the additional tax assessed against it.
After several conferences the claim for abatement was rejected in full. The petitioner was notified of the Commissioner's action on the claim for abatement by letter dated May 26, 1926, which provided as follows:
JAMES & HOLMSTROM PIANO CO.,
SIRS: Your claim for abatement of a deficiency in tax amounting to $571.29 assessed*2428 against you for the taxable year 1917 has been carefully considered by this office, and it is proposed to allow the said claim for $ None and to reject it for $571.29, as computed upon the enclosed statement.
In accordance with the provisions of Section 283(e) or Section 283(k) of the Revenue Act of 1926, you are allowed 60 days (not counting Sunday as the sixtieth day) from the date of mailing of this letter within which to file a petition with the United States Board of Tax Appeals, Earle Building, Washington D.C. contesting in whole or in part the correctness of this determination.
If you acquiesce in this determination and do not desire to file such petition, you are requested to execute waiver of your right to file a petition with the United States Board of Tax Appeals on the enclosed Form A, and forward it to the Commissioner of Internal Revenue, Washington, D.C., for the attention of IT: CR: E-TGH. In the event that you acquiesce in a part of the determination, the waiver should be executed with respect to the items to which you agree.
Respectfully,
By C. R. NASH,
*324 From the determination*2429 of the Commissioner as set forth in the letter of May 26, 1926, the petitioner appealed to the Board on July 24, 1926, claiming that collection of such assessment was outlawed by the statute of limitations.
On December 3, 1927, petitioner executed a collection waiver which expired December 31, 1928. This waiver provided:
TAX COLLECTION WAIVER
DEC. 3, 1927.
It is hereby agreed by and between James & Holmstrom Piano Company of 539 West 39th Street, New York City, party of the first part and the Commissioner of Internal Revenue, party of the second part, that the amount of $571.29, representing an assessment of income tax for the year(s) 1917 made against the said party of the first part, appearing on the Wash.-Mar. 87 spl. 22/1923 assessment list, page 8, line 6, for the Third District of New York, may be collected (together with such interest, penalties, or other additions as are provided by law) from said party of the first part by distraint or by a proceeding in court begun at any time prior to December 31, 1928.
(Signed) JAMES & HOLMSTROM PIANO CO.
By C. ALBERT JACOB,
DAVID H. BLAIR
By CHAS. W. ANDERSON
Except for the foregoing, the petitioner never consented in writing to the assessment of any additional income or profits taxes for the year ended December 31, 1917, nor to a determination of the assessment or the collection of additional taxes after the expiration of five years after the time when the petitioner's 1917 tax return was filed, namely May 2, 1918.
OPINION.
TRAMMELL: Upon authority of the appeal of , it is out opinion that the collection of the deficiency in this case is barred by the statute of limitations.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.