Fleitmann v. Burnet

• Decision Date: 03 April 1933
• Docket Number: No. 5655.,5655.
• Parties: FLEITMANN et al. v. BURNET, Com'r of Internal Revenue.
• Court: U.S. Court of Appeals — District of Columbia Circuit

65 F.2d 176 (1933)

FLEITMANN et al. v. BURNET, Com'r of Internal Revenue.

No. 5655.

Court of Appeals of the District of Columbia.

Argued February 17, 1933.

Decided April 3, 1933.

Howe P. Cochran, of Washington, D. C., for appellants.

G. A. Youngquist, Sewall Key, Morton K. Rothschild, C. M. Charest, and Bruce A. Low, all of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB, HITZ, and GRONER, Associate Justices.

GRONER, Associate Justice.

The appeal in this case involves income taxes for the year 1918 and is taken from a decision of the Board of Tax Appeals. The questions involved are: First, whether a waiver is valid where the commissioner has consented to the waiver but his name is not affixed thereto by him personally or by someone expressly authorized by him to sign his name; and, second, whether section 278 (e) of the Revenue Act of 1924 (43 Stat. 299, 26 USCA § 1062 note) renders invalid waivers executed after the enactment of that act with respect to taxes, the assessment and collection of which had become barred prior to the effective date of the act.

The question embraced in No. 2 above has since the argument been answered against the petitioner and in favor of the United States by the decision of the Supreme Court in McDonnell v. United States, 53 S. Ct. 410, 77 L. Ed. 869 (decided March 13, 1933).

The petitioners are executors of the estate of Herman C. Fleitmann. The latter filed his income tax return for the calendar year 1918 on March 15, 1919. The period of limitation expired on March 15, 1924, unless it was extended by valid waivers. Revenue Act 1921, § 250 (d), 42 Stat. 265. There were five waivers, the last dated September 27, 1929.

It is admitted that the taxpayer signed and returned the respective waivers. The first three received were, however, not signed by the commissioner personally, but the commissioner's name was affixed by Albert Lewis, the head of the Personal Audit Division of the Income Tax Unit. Lewis had been authorized in writing by the commissioner to sign his name to waivers. On the fourth waiver Commissioner Blair's name was affixed by the secretary to H. B. Robinson. Robinson was head of the division in the Income Tax Unit and was duly authorized to sign the commissioner's name. He in turn authorized his secretary to sign. The fifth waiver bore the name of Commissioner Lucas, who succeeded Commissioner Blair, and was followed by that of Collector Anderson at New York City. Anderson had authority to sign the commissioner's name; but, as in the case of Robinson, Anderson authorized his deputy to sign for him. The evidence shows in those cases in which the deputy or the collector did not personally sign the waiver, the rule and custom of the department required and secured his assent thereto as a condition precedent, or, as was testified, the waivers were brought to his desk and his approval had before his secretary or clerk signed in his behalf.

Stress was laid in the argument that the second and third waivers were to all intents and purposes duplications and had only the effect of extending the statute one year rather than two. The Board of Tax Appeals in its findings of facts reached a different conclusion, and we think correctly; but the question is not material since the decision in the Mc- Donnell Case, supra, if the subsequent waivers were valid. The fact that the waiver was executed after the running of the statute does not render it invalid. Burnet v. Chicago Ry. Equipment Co., 282 U. S. 295, 298, 51 S. Ct. 137, 75 L. Ed. 349.

It will thus be seen that the point in issue narrows itself to the question whether the collection of the deficiency was barred because the signature of the commissioner on the effective waiver was not made either by the commissioner personally or by some one expressly authorized by him. Petitioners' point is that the official of the Revenue Department who had been delegated authority to sign the name of the commissioner had no power under the statute to redelegate this power to a subordinate in his office, and so likewise it is insisted that the evidence will not bear out the claim that they did in fact authorize the signatures appearing on the particular waivers involved in this case.

We have already held Christopher v. Commissioner, 60 App. D. C. 368, 55 F.(2d) 530, 531 that the waiver need not be signed personally by the Commissioner, and we said in that connection: "The signing of a waiver is a mere ministerial act and may be done by the commissioner personally, or his name may be subscribed by another under his direction."

The Second Circuit Court of Appeals had previously reached the same conclusion (Onondaga Co. v. Commissioner, 50 F.(2d) 397, 399) and in addition said: "The courts have taken the view that an initial signature, not in the Commissioner's handwriting, will be presumed to be authorized within section 250 (d), where it appears in a waiver which has been the subject of official action."

Substantially the same conclusion was reached in the First, Third, Fourth, and Ninth Circuits. See United Thacker Coal Co. v. Commissioner (C. C. A. 1) 46 F.(2d) 231; Liberty Baking Co. v. Heiner (C. C. A. 3) 37 F.(2d) 703; Trustees for Ohio & Big Sandy Coal Co. v. Commissioner (C. C. A....