Hamilton v. Comm'r of Internal Revenue, Docket Nos. 19829

• Decision Date: 14 November 1949
• Docket Number: Docket Nos. 19829,21258.
• Citation: 13 T.C. 747
• Parties: REBECCA S. HAMILTON, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.JULIAN CHAQUENEAU, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
• Court: U.S. Tax Court

13 T.C. 747

REBECCA S. HAMILTON, PETITIONER,

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.JULIAN CHAQUENEAU, PETITIONER,

v.COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket Nos. 19829

21258.

Tax Court of the United States.

Promulgated November 14, 1949.

1. Petitioner Hamilton filed her 1944 income tax return with the collector for the third district of New York. The respondent, on March 10, 1948, by registered mail, sent his notice of deficiency to her at 415 East 51st Street, New York 22, New York. Since April 1945, the petitioner has been a resident of England and of Paris, France, where she resided at the time of the mailing of the deficiency notice. Her petition was filed on August 6, 1948, 149 days after the mailing of the deficiency notice. Held, that the filing of the petition was timely, under section 272(a)(1) of the Internal Revenue Code.

2. The respondent, on March 7, 1945, by registered mail, sent his notice of deficiency to petitioner Chaqueneau at his last known address, 24 East 94th Street, New York, New York. At the time of the mailing of the notice of deficiency, the petitioner was temporarily in South America on ‘a rather confidential matter.‘ His petition was filed on June 7, 1945, 92 days after the mailing of the notice of deficiency. Held, that as to petitioner Chaqueneau the 90-day period for filing a petition with the Tax Court, as prescribed in section 272(a)(1), is applicable, and, his petition having been filed 92 days after the mailing of the notice of deficiency, the Court is without jurisdiction therein. Russell B. Livermore, Esq., for the petitioner in Docket No. 19829, and Julian Chaqueneau, pro se, in Docket No. 21258.

Robert C. Whitley, Esq., for the respondent.

OPINION.

TURNER, Judge:

These proceedings were heard on motions of the respondent to dismiss for lack of jurisdiction, on the ground that the petitions were not filed within the period prescribed therefor in section 272(a)(1) of the Internal Revenue Code. ¹.

Petitioner Rebecca S. Hamilton filed her 1944 income tax return with the collector of internal revenue for the third district of New York. The respondent determined a deficiency of $462.36 in income tax against her for 1944, and on March 10, 1948, mailed notice thereof, by registered mail, to her at 415 East 51st Street, New York 22, New York. On August 6, 1948, 149 days after the mailing of the deficiency notice, her petition was filed. In the petition, it is alleged that the petitioner is residing in Paris, France, and that since April 1945 she has resided in England and France. It is her contention that since she was physically outside the States of the Union and the District of Columbia at the time of the mailing of the notice of deficiency, she was entitled, under the provisions of section 272(a)(1) of the Internal Revenue Code, to a period of 150 days within which to file her petition, and, the petition having been filed within 149 days, it was timely filed. She makes no claim that the New York address to which the deficiency notice was sent was not her address last known to the respondent.

Petitioner Julian Chaqueneau filed his 1941 income tax return, showing his address as Thompson, Ohio, with the collector of internal revenue at Cleveland. In January 1945 a revenue agent examined such of Chaqueneau's records as were available in the office of his accountants, and learned that his then address was 24 East 94th Street, New York, New York. The respondent determined a deficiency of $653.48 in income tax against him for 1941, and on March 7, 1945, sent notice thereof to him, by registered mail, at the New York address stated. On June 7, 1945, 92 days after the notice of deficiency was mailed, Chaqueneau filed his petition herein. In his petition, it is stated that he was out of the United States, and in South America, on business, from about October 15, 1944, to about April 15, 1945. With respect to Chaqueneau, there is no specific claim that the 150-day period is applicable in his case. He states that he was in South America on ‘a rather confidential matter‘ at the time the deficiency notice was mailed and he does not feel that any penalty should attach, because of such absence, and further, that as far as he ‘can see‘ his petition was filed within the 90-day period.

It is the position of the respondent that the deficiency notices were sent to each of these petitioners at their addresses last known to him, and, since such addresses were not outside the States of the Union and the District of Columbia, neither of the petitioners was entitled, under section 272(a)(1) of the code, to a longer period than 90 days within which to file a petition, and, since in each case the petition was filed after the running of the 90-day period, the proceedings should be dismissed for lack of jurisdiction.

It is to be noted that Congress, through the provisions of section 272(a)(1), has carefully outlined the steps the Commissioner of Internal Revenue must take in moving to the assessment and collection of deficiencies in income tax and, similarly, has prescribed the steps a taxpayer may take if he desires to litigate such liability through the Tax Court of the United States. First, the Commissioner, upon the determination of a deficiency, is ‘authorized‘ to send notice of such deficiency to the taxpayer by registered mail and, while by terms the sending of a notice by registered mail appears to be permissive, the provisions of the section which follow indicate that such procedure is mandatory, if the tax is to be finally determined and collected. John A. Gebelein, Inc., 37 B.T.A. 605. See also Botany Worsted Mills v. United States, 278 U.S. 282; Midtown Catering Co., 13 T.C. 92; and William M. Greve, 37 B.T.A. 450. It is next provided that a taxpayer may, within 90 days after such notice is mailed, file a petition with the Tax Court for a redetermination of the deficiency, and that the Commissioner may not assess or collect the deficiency until the expiration of the 90-day period, and, further, if a petition is filed with the Tax Court within that period, not until the decision of the Court has become final. With respect to ‘a person outside the States of the Union and the District of Columbia,‘ however, the period within which the taxpayer may file his petition is ‘one hundred and fifty days in lieu of ninety days.‘

From the date of the enactment of the Revenue Act of 1924, under which the Tax Court was created as the Board of Tax Appeals, until the enactment of the Revenue Act of 1934, the period within which a petition might be filed was, as to all taxpayers, 60 days from the mailing of the notice of deficiency. Under that provision, it was early settled and established law that the filing of the petition within the period specified by the statute was a prerequisite to the jurisdiction of the Board. Sam Satovsky, 1 B.T.A. 22. In enacting the Revenue Act of 1934, Congress substituted 90 days in the place of 60 days as the period within which a taxpayer might file his petition. The explanation for the proposed change given by the Committee on Ways and Means of the House of Representatives, in its report, was that ‘Experience has shown that this (60 days) is not sufficient time in case of involved assessments, or in case of taxpayers living a very great distance from Washington.‘ In reporting the bill to the Senate, the Committee on Finance expressed the same views. Thus the statute stood until the Revenue Act of 1942 became law on October 21, 1942. In that act two changes, or additions, were made to the statute fixing the time for filing petitions with the Tax Court. There was added to section 272(a)(1) the sentence which we are now called upon to interpret and apply, and which reads, ‘If the notice is addressed to a person outside the States of the Union and the District of Columbia, the period specified in this paragraph shall be one hundred and fifty days in lieu of ninety days.‘ There was also added to the code, section 3804² which was designed to expand, in situations described, the time specified for the performance of certain acts where the ability to do or perform those acts would or might be affected by the war.

The 150-day provision added at the end of section 272(a)(1) first appeared when the Revenue Bill of 1942 was reported to the Senate by its Committee on Finance, and was explained in the committee report as follows:

Under existing law if a notice of deficiency in income tax is mailed to a taxpayer he has 90 days within which to file his petition with the Board of Tax Appeals. In the case of a taxpayer in remote places, such as Hawaii or Alaska, this time limit may possibly work a hardship because of delays in transporting mail that may occur during the present hostilities. To correct this hardship section 272(a)(1) of the Code has been amended to increase the period to 150 days if the notice is mailed to a person outside the States of the Union and the District of Columbia. This extension applies only to deficiency notices mailed after the date of enactment of the act. (Senate Finance Committee Report No. 1631, Seventy-seventh Congress, second session, p. 154.)

As the result of a conference on the bill, the House receded and accepted the Senate amendment without explanation other than a statement in the conference report of the substance of the sentence added.

With respect to the new section 3804, the committee reports limited their comment to a statement of the proposition that the suspension of the various periods prescribed by statute for the performance of the acts specified was because the performance of those acts was impracticable or impossible on account of war conditions during the period an individual was outside the Americas.

Rather obviously, the sentence added by the 1942 Act, to the effect that if the deficiency notice ‘is addressed to a person outside the States of the Union and the District of Columbia,‘ the period...