Miami Valley Coated Paper Co. v. COMMISSIONER OF INT. R.

• Decision Date: 09 April 1954
• Docket Number: No. 11919.,11919.
• Citation: 211 F.2d 422
• Parties: MIAMI VALLEY COATED PAPER CO. v. COMMISSIONER OF INTERNAL REVENUE.
• Court: U.S. Court of Appeals — Sixth Circuit

211 F.2d 422 (1954)

MIAMI VALLEY COATED PAPER CO. v. COMMISSIONER OF INTERNAL REVENUE.

No. 11919.

United States Court of Appeals Sixth Circuit.

April 9, 1954.

Scott P. Crampton, Washington, D. C. (Carl K. Goodson, Washington, D. C., Hugh E. Wall, Jr., Dayton, Ohio, on the brief), for petitioner.

Carolyn R. Just, Washington, D. C. (H. Brian Holland, Ellis N. Slack, Joseph F. Goetten, Washington, D. C., on the brief), for respondent.

Before SIMONS, Chief Judge, and McALLISTER and MILLER, Circuit Judges.

SIMONS, Chief Judge.

The question presented by this appeal is whether a taxpayer who, after the Commissioner has determined deficiencies in excess profit taxes declared value excess profits taxes and income taxes, filed a timely petition for redetermination only of the excess profits tax, may, after the statutory period for filing a petition to the Tax Court has run, amend its original petition for the purpose of seeking a redetermination of deficiencies in taxes not originally sought. The Tax Court, following its previous adjudications in analogous cases, answered the question in the negative, and this appeal followed.

On June 9, 1950, the Commissioner of Internal Revenue, pursuant to §§ 272 and 732 of the Internal Revenue Code, 26 U.S.C.A. §§ 272, 732, mailed to the petitioner a combined notice of deficiencies in income tax in declared value excess profit tax and excess profit taxes and also disallowed a claim for refund of excess profits taxes. Within the 90-day period allowed by §§ 272 and 732, the petitioner, on August 28, 1950, filed with the Tax Court a petition seeking redetermination of the Commissioner's disallowances of claims for relief applied for under § 722. The petition stated: "The taxes in controversy are excess profits taxes for the fiscal years ended April 30, 1944, April 30, 1945, and April 30, 1946. * * *" Within the 60 days allowed by Rule 14 of the Tax Court Rules of Practice, the Commissioner filed his answer. The proceeding was then placed upon the calendar for hearing. Two years later, on October 24, 1952, before the case had been set for trial, the petitioner filed an amended petition, raising new issues with respect to the excess profits taxes challenged by the original petition but also alleging errors by the Commissioner in his assertion of deficiencies in income tax and declared value excess profits taxes. The Tax Court granted the Commissioner's motion to dismiss but only insofar as it related to deficiencies in income taxes and declared value excess profits taxes. It declined to dismiss insofar as it related to new issues in respect to the excess profits tax. The dismissal was summary for lack of jurisdiction, without argument or citation of applicable law.

The so-called 90-day letter is based upon § 272(a) (1) of the Code which provides that if the Commissioner determines there is a deficiency in respect to the tax imposed by "this chapter" he is authorized to send notice of it to the taxpayer by registered mail and the taxpayer, within 90 days after such notice is mailed, may file a petition with the Board of Tax Appeals (now the Tax Court) for a redetermination of the deficiency. It is agreed that the judicial powers of the Tax Court are limited by the statute. The court is empowered to review the Commissioner's determination in respect to deficiencies in enumerated taxes which include those upon income, excess profits and declared value excess profits, and when the Commissioner has sent notice to the taxpayer, as provided, and the taxpayer properly appeals from the determination, the court may assume jurisdiction. The timely filing of a petition is jurisdictional, and this the present petitioner does not deny. Its contention is that since its original petition was in time, and since the taxes involved are interrelated, and the deficiencies asserted by the Commissioner were the subject-matter of a combined notice, § 732 gives the Tax Court jurisdiction of all three asserted deficiencies. It leans heavily upon H. Fendrich, Inc., v. Commissioner, 7 Cir., 192 F.2d 916, a case which holds that an amendment is timely which raises new issues in respect to a petition for redetermination of an excess profits tax after the running of the 90-day period. It relies also upon the wording of § 732 (a) wherein occurs the sentence, in reference to a petition for refund, "If such petition is so filed, such notice of disallowance shall be deemed to be a notice of deficiency for all purposes relating to the assessment and collection of taxes or the refund or credit of overpayments." Significance is attached to the italicized plurals.

The Commissioner, however, argues that the income tax, the declared value excess profits tax and the excess profits tax are to be treated separately for jurisdictional purposes and that a petition challenging only the deficiency in excess profits taxes does not constitute a petition for redetermination of the deficiency in income tax or the deficiency in declared value excess profits tax. It urges that the three taxes here involved are of different types and points to the fact that the Fendrich case dealt with but a single tax classification and involved no other kind of tax. The Tax Court decision is not in conflict with it for it has retained jurisdiction of the petitioner's challenge to the deficiency in the excess profits tax.

The Tax Court rulings, in differentiating for jurisdictional purposes the differing types of taxes, have been consistent. Where a proceeding involved a deficiency in excess profits tax, and the same notice advised of an overassessment in income tax...