Norwitt v. Commissioner

Memorandum Findings of Fact and Opinion

OPPER, Judge: The respondent determined a deficiency against petitioner Paul C. Norwitt, and his wife Frieda Norwitt, as follows:

Findings of Fact

During the years 1942 and 1943, petitioner Paul C. Norwitt and his wife, Frieda*18 Norwitt, resided in San Francisco, California.

On or about April 15, 1943, a joint Federal income tax return for the calendar year 1942 was filed by Paul C. and Frieda Norwitt with the collector of internal revenue for the first district of California. On this return net income was reported in the amount of $1,721.19. On Schedule H income was reported from a business known as "General Refrigerator Co.," and the total receipts from the business for the year 1942 were shown as $76,079.48.

On or about March 15, 1944, a joint Federal income tax return for the calendar year 1943 was filed by Paul C. and Frieda Norwitt with the collector of internal revenue for the first district of California. On this return income tax net income was reported in the amount of $4,256.95. On Schedule C(2) income was reported from the General Refrigerator Co., and the total receipts from the business for the year 1943 were shown as $53,299.70.

The sales reported on the original income tax returns filed by Paul C. and Frieda Norwitt for each of the years 1942 and 1943 were understated. In each of the years 1942 and 1943, Paul C. Norwitt and Frieda Norwitt received taxable net income in excess of the amount*19 reported by them on the returns.

On or about June 23, 1945, Paul C. and Frieda Norwitt filed joint amended Federal income tax returns for the years 1942 and 1943. The amended returns purport to have been prepared on a net worth basis. On the amended return for 1942, net income is shown in the amount of $11,540.74, and on the amended return for 1943, income tax net income is shown in the amount of $28,081.04.

On or about May 6, 1949, the Commissioner of Internal Revenue issued a notice of deficiency to Paul C. and Frieda Norwitt in which deficiencies in income tax and penalties (under section 293(b) of the Internal Revenue Code of 1939) were determined in the following amounts:

On August 1, 1949, there was filed with The Tax Court of the United States a document purporting to be a petition of Paul C. Norwitt and Frieda Norwitt named on the notice of deficiency.

Paul C. Norwitt was indicted in the District Court of the United States for the Northern District of California, Southern Division, and was convicted upon a plea of not guilty and a verdict of guilty of the offense of*20 violation of Title 26 U.S.C. section 145(b), upon three counts of unlawfully attempting to defeat and evade income taxes for the calendar years 1941, 1942, and 1943, by filing false and fraudulent income tax returns for those years, as charged in the indictment. On April 10, 1951, he was sentenced to imprisonment for a period of 1 year on each of the three counts and to pay a fine of $10,000. This conviction was affirmed by the Court of Appeals for the Ninth Circuit on March 12, 1952, in an opinion which is reported at 195 F. 2d 127, and certiorari was denied 344 U.S. 817.

There are deficiencies in income taxes of Paul C. Norwitt for the years 1942 and 1943 in the amounts of $18,105.23 and $28,401.54, respectively.

The deficiency in income tax for each of the years 1942 and 1943, or a portion of each deficiency, is due to fraud with intent to evade tax.

It has been stipulated that the wife of petitioner Paul C. Norwitt, Frieda Norwitt, did not sign the verification of the petition herein, and did not authorize counsel at or prior to the filing of such petition to sign it nor to file it. The signature on the petition purporting to*21 be that of Frieda Norwitt, wife of petitioner Paul C. Norwitt, is not her signature.

Opinion

This proceeding was dismissed as to the deficiencies with respect to petitioner Paul C. Norwitt at the hearing for failure to prosecute. The sole remaining issue as to him is disposed of by our finding of fact that some part of the deficiency for each year was due to fraud.

At the hearing it appeared in effect that no petition had ever been executed by or for the former wife of petitioner Paul C. Norwitt, nor properly filed on her behalf. Tax Court Rules of Practice, Rule 7. Her appearance at the hearing was in effect a special appearance. On these grounds a joint motion to dismiss the proceeding, insofar as it affected her, for lack of jurisdiction was granted at the time the proceedings were heard.

Decision will be entered for respondent against petitioner Paul C. Norwitt; and an order will be entered dismissing the proceeding for lack of jurisdiction as to Frieda Norwitt.