Galvin v. Commissioner, Docket No. 11697-81.

• Decision Date: 29 November 1982
• Docket Number: Docket No. 11697-81.
• Citation: 45 TCM (CCH) 221,1982 TC Memo 689
• Parties: Dale A. Galvin and Nancy M. Galvin v. Commissioner.
• Court: U.S. Tax Court

45 TCM (CCH) 221

1982 TC Memo 689

T.C. Memo. 1982-689.

Dale A. Galvin and Nancy M. Galvin v. Commissioner.

Docket No. 11697-81.

United States Tax Court.

Filed November 29, 1982.

Merritt A. Gardner, 2600 First Florida Tower, Tampa, Fla., for the petitioners. Jane T. Dickinson, for the respondent.

Memorandum Findings of Fact and Opinion

TANNENWALD, Chief Judge:

This case is currently before us on petitioners' motion for summary judgment under Rule 121.¹ Respondent determined the following deficiencies in and additions to petitioners' Federal income taxes:

                                                    Additions to
                                                     tax under
                  Year                  Deficiency  sec. 6653(b)2
                  1971 ...............    $  112       $  662
                  1972 ...............     1,762        3,888
                  1973 ...............     2,964        6,468
                

The sole issue for our determination is whether the statute of limitations bars the assessment and collection of the deficiencies in and additions to tax.

For purposes of this motion only, some of the facts have been stipulated and are found accordingly.

Petitioners, Dale A. Galvin and Nancy M. Galvin, resided in Englewood, Fla., when the petition in this case was filed. Petitioners timely filed joint Federal income tax returns for 1971, 1972, and 1973 (the original returns). For each of the years in issue, there was an underpayment of the tax required to be shown on petitioners' original return. All or a part of each such underpayment was due to fraud. Petitioners omitted from each of their original returns gross income in excess of 25 percent of the gross income reported and failed to disclose receipt of such omitted gross income on the returns or in statements attached thereto.

On March 31, 1975, petitioners filed amended income tax returns for 1971 through 1973 (the amended returns). None of petitioners' amended returns omits gross income exceeding 25 percent of the reported amounts. Underpayments, if any, of tax required to be shown on petitioners' amended returns are not due to fraud.

Respondent issued his statutory notice of deficiency for the years in issue on March 2, 1981. Petitioners have not at any time consented to the extension of the statute of limitations applicable to 1971, 1972, or 1973.

In their motion for summary judgment, petitioners claim that respondent's proposed assessments are barred by the statute of limitations found in section 6501(a).³ Respondent, on the other hand, asserts that, since petitioners' original returns were fraudulent, section 6501(c)(1) controls⁴ and he may assess a tax at any time.

Our decision in Klemp v. Commissioner Dec. 38,109, 77 T.C. 201 (1981), on appeal (9th Cir., Nov. 2, 1981), is dispositive of the issue in the present case. In Klemp, a case involving a factual situation almost identical to the one herein, we held that, upon the filing of the nonfraudulent amended returns, the 3-year statute of limitations provided for in section 6501(a) started running. Accord: Deleet Merchandising Corp. v. United States 82-1 USTC ¶ 9184, 535 F. Supp. 402 (D.N.J. 1981); Britton v. United States 81-2 USTC ¶ 9739, 532 F. Supp. 275 (D. Vt. 1981), affd. in an unreported opinion (2d Cir., Apr. 15, 1982). Despite respondent's plea, we are not disposed to depart from the position taken in Klemp. Accordingly, since respondent issued the deficiency notice in the instant case more than three years after the amended returns were...