Avery v. Commissioner of Internal Revenue

• Decision Date: 01 November 1927
• Docket Number: No. 5136.,5136.
• Citation: 22 F.2d 6,55 ALR 1277
• Parties: AVERY v. COMMISSIONER OF INTERNAL REVENUE.
• Court: U.S. Court of Appeals — Fifth Circuit

55 ALR 1277, 22 F.2d 6 (1927)

AVERY v.COMMISSIONER OF INTERNAL REVENUE.

No. 5136.

Circuit Court of Appeals, Fifth Circuit.

November 1, 1927.

Edgar Watkins, of Atlanta, Ga. (Mac Asbill and Edgar Watkins, Jr., both of Atlanta, Ga., on the brief), for petitioner.

Mabel Walker Willebrandt, Asst. Atty. Gen., A. W. Gregg, General Counsel, Bureau of Internal Revenue, and W. Frank Gibbs, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., for respondent.

Before WALKER, BRYAN, and FOSTER, Circuit Judges.

FOSTER, Circuit Judge.

This is a petition for review of a decision of the United States Board of Tax Appeals.

Petitioner, Thomas J. Avery, an inhabitant of Georgia, in filing his income tax return for 1919, claimed as a deduction the sum of $36,567.28 for debts ascertained to be worthless and charged off during that taxable year.The Commissioner of Internal Revenue, respondent, allowed a deduction of only $1,841.26 and determined a deficiency of taxes amounting to $15,335.65.On appeal the board allowed an additional deduction of $392.96, determined that the other worthless accounts charged off in 1919 were not ascertained to be worthless during that year, found the deficiency in income tax to be $15,143.10, and entered an order accordingly.

The first question to be considered is our jurisdiction to reveiew a decision of the Board of Tax Appeals.The board was created by title 9 of the Revenue Act of 1924(26 USCA §§ 1211-1222 Comp. St. § 6371 5/6b), and taxpayers were given the right to appeal to the board from decisions of the Commissioner of Internal Revenue determining a deficiency of taxes.After an adverse decision by the board, the taxpayer had no further remedy than to pay the taxes and sue to recover them, the same as from an adverse decision of the Commissioner, and by the statute creating it (section 900 g, being 26 USCA § 1218 Comp. St. § 6371 5/6b), the findings of the board were made prima facie evidence of the facts therein stated in any suit or proceeding by the taxpayer.The board was continued as an independent agency in the executive branch of the government by the Revenue Act of 1926, and by section 1003 of the said act (44 Stat. 110)the Circuit Courts of Appeals were given jurisdiction to review its decisions.Section 1003 reads as follows:

"Sec. 1003.(a)The Circuit Courts of Appeals and the Court of Appeals of the District of Columbia shall have exclusive jurisdiction to review the decisions of the board (except as provided in section 239 of the Judicial Code, as amended); and the judgment of any such court shall be final, except that it shall be subject to review by the Supreme Court of the United States upon certiorari, in the manner provided in section 240 of the Judicial Code, as amended.

"(b) Upon such review, such courts shall have power to affirm or, if the decision of the board is not in accordance with law, to modify or to reverse the decision of the board, with or without remanding the case for a rehearing, as justice may require."

It was undoubtedly the intention of Congress to create an independent board of experts to decide impartially between the government and the taxpayer, with the right to a final determination of the questions presented in a regularly constituted court before payment of the tax.It is consistent with that intention to say that it was not contemplated that the Courts of Appeals should be burdened with reviewing the mass of evidence usually submitted before a board charged with the duty of considering technical details.

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