Schroll v. Commissioner

*1028 This proceeding is for the redetermination of a deficiency in income tax for the year 1917, asserted against petitioner as his liability as a transferee of the assets of the Atlas Dental Co., an Illinois corporation. Said deficiency consists of unpaid income and profits tax of $2,505.23; interest to February 5, 1927, $1,260; and a 5 per cent penalty, $125.26; total, $3,890.49.

One of the issues raised by the pleadings is a plea that the collection of the tax is barred by limitation. A joint motion was filed by petitioner and respondent, asking that the present consideration be limited to the limitation issue, which motion was granted; hence, no evidence was offered on other issues.

From the pleadings and from the*1985 stipulations filed, we make the following findings of fact.

FINDINGS OF FACT.

The Atlas Dental Co. filed its income-tax return for the year 1917 on March 28, 1918. On the March 26, 1923, list, the Commissioner assessed the tax here in question to the extent of $2,669.51, against the Atlas Dental Co. The Atlas Dental Co. "was duly and legally dissolved in the year 1920." The deficiency notice to the petitioner was mailed by the Commissioner on February 25, 1927. The following document was executed on February 17, 1923:

INCOME AND PROFITS TAX WAIVER.

In pursuance of the provisions of subdivision (d) of Section 250 of the Revenue Act of 1921, ATLAS DENTAL COMPANY of Chicago, Illinois, 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 ATLAS DENTAL CO. for the years 1917 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*1986 purposes," approved August 5, 1909. This waiver is in effect for one year from the date it is signed by the taxpayer.

(Signed) ATLAS DENTAL COMPANY, Taxpayer.

W. H. SCHROLL, Pres.

D. H. BLAIR, Commissioner.

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 must be affixed.

OPINION.

LOVE: If the issue here involved were one of first impression, we would be sadly perplexed in arriving at a conclusion. However, as the situation now exists, we believe the Supreme Court has settled the issue. The case of , was *1029 a case involving the identical issue here involved. It was originally tried in the District Court, where a judgment was rendered against the Government. The case was appealed by the Government to the Circuit Court of Appeals for the Fifth Circuit, where the judgment of the lower court was reversed. The case then went to the Supreme Court, where*1987 the decision of the Circuit Court was reversed. We believe that the Russell case controls the issue in the instant case, and therefore hold that limitation has barred the collection of the tax here in question.

Judgment will be entered for the petitioner.