33 T.C. 298 (1959), 67563, Parks v. C. I. R.

Docket Nº:67563.
Citation:33 T.C. 298
Opinion Judge:RAUM, Judge:
Attorney:Earle C. Parks, Esq., pro se. Raymond T. Mahon, Esq., for the respondent.
Case Date:November 23, 1959
Court:United States Tax Court

Page 298

33 T.C. 298 (1959)




No. 67563.

United States Tax Court.

November 23, 1959

Earle C. Parks, Esq., pro se.

Raymond T. Mahon, Esq., for the respondent.

1. Determination of deficiency as to 1952 held not barred by petitioners' claim of ‘ accord and satisfaction.’

2. Addition to tax under section 294(d)(1)(A), I.R.C. 1939, sustained.

Respondent determined deficiencies in petitioners' income tax and additions thereto, as follows:

Additions to tax, I.R.C. 1939
Year Deficiency Sec. 294 (d) (1) (A) Sec. 294 (d) (2)
1952 $2,279.36 None $833.59
1954 949.66 $1,184.92 710.96

The principal questions are:

1. Was there an ‘ accord and satisfaction’ between petitioners and respondent with respect to petitioners' income tax liability for 1952 so as to preclude respondent from assessing additional taxes for that year? 2. Are petitioners relieved of liability for addition to tax under section 294(d)(1)(A) for failure to file a declaration of estimated tax for 1954 by reason of certain alleged representations made by or in the presence of an assistant district director of internal revenue?

FINDINGS OF FACT. Petitioners, husband and wife residing in Belmont, Massachusetts, filed joint income tax returns for the calendar years 1952 and 1954 with the district director of internal revenue for the district of Massachusetts. Earle C. Parks, hereinafter referred to as petitioner, is a practicing attorney at law and is a member of the bars of the Commonwealth of Massachusetts, the United States District Court for Massachusetts, the United States Supreme Court, and the Tax Court of the United States. Petitioners filed their 1952 return on or about March 16, 1953, reporting a tax of $14,705.88 and a ‘ balance of tax due’ in the amount of $11,613.88 after withholding and payments on their 1952 Declaration of Estimated Tax. Petitioners did not then pay the balance due. At that time they also owed back taxes for the years 1950 and 1951 which, pursuant to an arrangement made at some undisclosed time, they were paying at the rate of $1,000 a month. By March 1954, $10,000 of petitioners' 1952 taxes as reported on the 1952 return remained unpaid, and a lien had been placed upon real estate owned by petitioner to insure payment of such tax. Page 299 In March 1954, petitioner was called to a conference at the Boston office of the district director. Present at this conference were petitioner, his law partner, Frank C. Hession, and two revenue agents attached to the district director's office. Petitioner was informed of the lien that had been placed upon his property and was requested to make payment of the balance due on his 1952 return. As a result of this conference and an examination of petitioner's books and records incident thereto, it was agreed that the lien would be lifted if petitioner raised the requisite $10,000 by placing a mortgage on his home. Shortly thereafter, at a second conference, petitioner paid the amount due with a check representing the proceeds of a mortgage placed on his home, and the lien was discharged. Present at this second conference were petitioner, the assistant district director, Charles J. King, and two revenue agents, one of whom had attended the earlier conference. After presentation of the check for 1952, such payments to be applied firs against petitioner's tax liability for 1953, and then against his liability for 1954. Although some discussion was had with respect to petitioner's possible liability for ‘ penalties' for 1954, neither King, nor any other internal revenue official present at the conference, represented to petitioner that only one ‘ penalty’ would be assessed against him in the event he failed to file a declaration of estimated tax for 1954. Petitioners failed to file a declaration of estimated tax for 1954. Sometime after the second conference, ‘ in either the fall of 1954 or the spring of 1955,‘ a revenue agent named James Hooley examined petitioner's books and records for 1952, 1953, and 1954. This examination covered a period of 10 months during which time Hooley spent 2 or 3 days per month in petitioners' office. Petitioner did not hear from Hooley again after the expiration of the 10-month period. A month or two after Hooley's departure, petitioner's books for 1952, 1953, and 1954 were examined again by a revenue agent named Martin Berg. Berg visited petitioner's office every day for a period of 3 weeks. Petitioner told both Hooley and Berg that he objected to their examinations with respect to 1952 on the ground that thay year had been ‘ settled’ or ‘ closed.’ Form 872, attached to petitioners' 1952 return and entitled ‘ Consent Fixing Period of Limitation Upon Assessment of Income and Profits Tax’ was executed by petitioners on January 24, 1956, and by the Commissioner on February 16, 1956; it extended to June 30, 1957, the period for assessing additional income tax for the taxable...

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