Constitution Publishing Co. v. COMMISSIONER OF INTERNAL REVENUE, Docket No. 34159.
| Decision Date | 27 February 1931 |
| Docket Number | Docket No. 34159. |
| Parties | CONSTITUTION PUBLISHING COMPANY, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. |
| Court | U.S. Board of Tax Appeals |
W. A. Sutherland, Esq., Joseph B. Brennan, Esq., and L. L. Davis, C. P. A., for the petitioner.
L. W. Creason, Esq., for the respondent.
This is a proceeding for the redetermination of a deficiency in income tax for the calendar year 1922 in the amount of $670.38. The only assignment of error is that the assessment of the deficiency was barred at the time of the mailing of the notice of deficiency on November 22, 1927.
FINDINGS OF FACT.
The petitioner is a corporation with its principal office in Atlanta, Ga. The income tax return for the calendar year 1922 was filed on June 15, 1923. The following instrument was signed September 29, 1926:
ATLANTA, GA., Sept. 29, 1926.
In pursuance of the provisions of existing Internal Revenue Laws the Constitution Publishing Company, a taxpayer of Atlanta, Ga., and the Commissioner of Internal Revenue hereby waive the time prescribed by law for making any assessment of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of said taxpayer for the year 1922, seven months ended July 31, under existing revenue acts, or under prior revenue acts.
This waiver of the time for making any assessment as aforesaid shall remain in effect until December 31, 1927, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days or (2) if an appeal is filed with said Board then said date shall be extended by the number of days between the date of mailing of said notice of deficiency and the date of final decision by said Board.
(Signed) CONSTITUTION PUBLISHING COMPANY Taxpayer. By CLARK HOWELL, General Manager. SEAL. D. H. BLAIR, Commissioner. Attest J. STOW, Secretary. SEAL.
The notice of deficiency for the calendar year 1922 was mailed on November 22, 1927. The books of account of the petitioner were always kept on the calendar year basis and its income tax returns were filed on the same basis, and there was no change for the year 1922.
An internal revenue agent made an examination of the books and records of the petitioner for the year 1922. The petitioner received a copy of the revenue agent's report and adjustments therein were discussed with the officers of the petitioner corporation. No question was raised with respect to the taxable period. On September 28 or 29, 1926, the same revenue agent who had made the examination of the books and records prepared and presented to the petitioner for signature the above quoted waiver, which was duly signed by the petitioner and returned. The revenue agent who prepared the above consent in writing inadvertently inserted "seven months ended July 31," in error, as that clause was intended by him to be inserted in a waiver form prepared for a different taxpayer.
The petitioner contends that the consent in writing which extends the time for making assessment of the amount of income or profits taxes due under any return "for the year 1922, seven months ended July 31," is not sufficient to extend the time for assessing the tax for the calendar year 1922, which is the period involved in this proceeding.
The expression "for the year 1922" and the expression "seven months ended July 31" are conflicting. The "year 1922" without any qualification, can be taken as meaning the calendar year. If either expression were used alone the meaning would be clear enough and it would not be necessary to resort to the usual rules of statutory construction of a doubtful or ambiguous instrument. When the two expressions are used together the instrument is ambiguous. If the expression had been "seven months ended July 31, 1922," or the "taxable year 1922, seven months ended July 31," we might well conclude that the period stated in the instrument was only the short period and not the calendar year and that the parties by mutual mistake had included the wrong period in the waiver. It might be reasonable to conclude that the period ended July 31, 1922, was referred to in the waiver.
The question here is whether the instrument contains a mistake of expression as to the period, both parties intending something else, that is, whether the instrument embraced terms not intended by the parties and does not contain their true meaning and intention, or whether the expressions used are merely ambiguous and are subject to the rules of construction for ambiguous instruments. If the language used were clear and without ambiguity and referred to the period "ended July 31, 1922," we can not resort to any rules of construction to give the waiver a different meaning, regardless of the intention of the parties. We are without power of a court of equity and we can not substitute another consent for that expressed by the parties. We can not reform the instrument, although both parties intended something else. On the other hand, if the expression used and the language of the instrument is merely ambiguous, the rules of construction with respect to doubtful or ambiguous contracts or documents are applicable here. Upon this ground we have the right and it is our duty to determine what period the...
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