Girard v. Gill

• Decision Date: 24 July 1956
• Docket Number: Civ. No. 915-G.
• Citation: 142 F. Supp. 770
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Cy GIRARD, Sam R. Girard, Herbert A. Girard, as Executors of the Estate of Frank Goldberg, deceased, and Sadie P. Goldberg, Plaintiffs, v. Edwin GILL, formerly Collector of Internal Revenue, Defendant.

142 F. Supp. 770

Cy GIRARD, Sam R. Girard, Herbert A. Girard, as Executors of the Estate of Frank Goldberg, deceased, and Sadie P. Goldberg, Plaintiffs, v. Edwin GILL, formerly Collector of Internal Revenue, Defendant.

Civ. No. 915-G.

United States District Court M. D. North Carolina, Greensboro Division.

July 24, 1956.

Heyman, Abram & Young, Charles F. Wittenstein, Atlanta, Ga., for plaintiff.

Edwin M. Stanley, U. S. Atty., Greensboro, N. C., for defendant.

HAYES, District Judge.

The plaintiffs have moved for a summary judgment on the basis of the pleadings, the admissions and stipulations and the defendant has also moved for summary judgment.

The plaintiffs, executors of Frank Goldberg and Sadie P. Goldberg, brought this action to recover $21,352.36 with interest from July 22, 1952 which they allege is income taxes exacted of the plaintiffs as additional taxes to those paid under the joint return of Frank Goldberg and Sadie Goldberg for the calendar year 1943. The plaintiffs contend that the tax was not levied or assessed prior to June 30, 1952 and that the Commissioner's right to assess said taxes was barred by the Statute of limitations. The plaintiffs further allege that they had previously executed a consent in writing extending the period of limitations to June 30, 1952 but the plaintiffs also allege that the Commissioner did not accept the proposal and did not levy said tax prior to June 30, 1952.

The defendant admits that the Commissioner had no right to assess or levy said tax subsequent to June 30, 1952. But he contends that the Commissioner was authorized by the taxpayers to levy the tax any time prior to June 30, 1952 and that the Commissioner did accept the proposal on the 18th day of June, 1952 and that said assessment was made in list No. 17 dated June 30, 1952. The defendant further pleads an estoppel against repudiation of the written proposal extending the time for the assessment of taxes.

There are three of these actions to recover alleged erroneously assessed taxes involving Frank Goldberg, deceased, and corporations and partnerships in which he owned an interest, the court having disposed of 913 in another order and 914 is pending for trial.

Among other things it is stipulated that the assessment involved in this case was entered under the authority of the Acting Deputy Commissioner of Internal Revenue at Washington, D. C. under his assessment certificate dated June 30, 1952; that said assessment was made under the authority of Section 272(d) Internal Revenue Code of 1939, 26 U.S. C.A., and that no record appears of any issuance of any 90-day letter; The Collector of Internal Revenue received the list on July 3rd, the plaintiffs were notified of said assessment by notice and demand dated July 10, 1952.

It is further stipulated that during the year 1952 in cases not docketed with the Tax Court of the United States it was customary to transmit to the taxpayer and his representatives three copies of Waiver Form 870 T.S. for his signature and return for approval and acceptance by or on behalf of the Commissioner; that the taxpayer and his representatives were customarily notified; that if, and when the settlements were approved on behalf of the Commissioner, copies of the accepted agreement would be returned for the taxpayer's file, and it was customary to transmit the form to the taxpayer under a covering letter of transmittal.

It is further stipulated that Mr. Peter J. Troy was counsel for the plaintiffs in handling this case and five other taxpayers related to the deceased and that Troy was representing these six clients at the same time and that when these forms were handed to him in connection with the six cases, he does not recall that anything was said about the return of the forms but it was his understanding that normal procedure would be followed. It is agreed that forms 870 T.S. accepted on behalf of the Commissioner were transmitted to the taxpayer and his representative under letter of June 18, 1952 from Herbert D. Smith, Acting Head Atlanta Division, Appellate Staff, Washington, D. C., in the five other cases which are not at bar. However, in the case at bar, Form 870 T.S. is not referred to in the aforementioned letter of June 18, 1952.

It was the understanding of the Appellate Staff of the Internal Revenue Service that the case at bar with the five other cases above referred to were all related and considered as a group or a single proposal for settlement orally submitted by Mr. Troy. In this proposal separate deficiencies or overpayments were proposed in each of the 6 cases. The overpayments to which some of these taxpayers were entitled were, by their agreement, applied to the deficiency due from the estate of Frank Goldberg.

The plaintiffs contend that they are not barred from maintaining this suit by the language of their offer and that the failure of the Commissioner to communicate an acceptance within the statutory period...