Michael v. COMMISSIONER OF INTERNAL REVENUE, Docket No. 30215
| Decision Date | 10 March 1931 |
| Docket Number | 31832,31837,Docket No. 30215,31836,31839. |
| Parties | EDWARD MICHAEL, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. ISIDORE MICHAEL, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. CLARK L. INGHAM, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. ELGOOD C. LUFKIN, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. LULA M. LUFKIN, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. |
| Court | U.S. Board of Tax Appeals |
F. J. Maguire, Esq., for the petitioners.
A. H. Fast, Esq., for the respondent.
These proceedings involve the 1922 individual income tax liability of five individuals, three of whom are residents of Buffalo, N. Y., and two residents of New York City. The deficiencies in controversy are as follows:
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| | |
Name | Residence | Docket | Deficiency
| | No. |
------------------------|------------------------|----------|-----------
Isidore Michael _______ | Buffalo, N. Y ________ | 30215 | $73,569.30
Edward Michael ________ | Buffalo, N. Y ________ | 31832 | 82,912.41
Clark L. Ingham _______ | Buffalo, N. Y ________ | 31836 | 45,438.33
Lula M. Lufkin ________ | New York City ________ | 31837 | 27,128.25
Elgood C. Lufkin ______ | New York City ________ | 31839 | 10,084.84
| | | __________
Total _________ | ______________________ | ________ | 239,133.13
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The five cases involve a number of issues which are common to all of them and by order of the Board dated December 7, 1929, they were consolidated for purposes of hearing.
One of the common issues is raised by the petitioners' claim that the deficiency in each of these cases is a second determination of deficiency in respect of the same taxable year. If this claim of the petitioners is well taken a decision to that effect will dispose of these entire proceedings. The Board therefore ordered that the issues be severed and that this one issue be presented in advance of the other issues.
The facts concerning this issue are not in controversy, but were settled by a written stipulation entered into between the parties and filed with the Board on September 8, 1930. The facts covered by the stipulation refer to a number of the different issues, but the portions of it which have to do with the one issue before us are as follows:
The Buffalo Realty Company was organized January 23, 1902, under the laws of the State of New York for the purpose of purchasing certain properties located in Buffalo, New York, razing the buildings thereon and erecting a modern building. In 1922 the entire property was sold.
During the year 1922 until liquidation, the petitioners owned common stock of the Buffalo Realty Company as follows:
Clark L. Ingham ________________________________ 175 shares
Edward Michael _________________________________ 246 shares
Isidore Michael ________________________________ 246 shares
Elgood C. Lufkin _______________________________ 31 shares
Lula M. Lufkin _________________________________ 100 shares
That after the complete liquidation of the Buffalo Realty Company, respondent determined that there was an additional tax due from the Buffalo Realty Company for the year 1922. Pursuant to Section 280 of the Revenue Act of 1926, respondent sent out notices of liability under date of November 19, 1926 to each of the following: Mrs. Lula M. Lufkin, Edward Michael, Elgood C. Lufkin, Clark L. Ingham and Isidore Michael. Copies of the respective notices of liability are attached hereto as Exhibits A, B, C, D, and E.
On January 17, 1927, Lula M. Lufkin, Edward Michael, Elgood C. Lufkin, Clark L. Ingham and Isidore Michael each filed separate petitions under dockets numbered 22627, 22626, 22630, 22629 and 22620, respectively, appealing from the respective notices of deficiency sent out on November 19, 1926.
The appeals were consolidated for hearing and decision and under date of March 20, 1928, the Board entered its final order of redetermination as follows:
The pleadings show that the deficiency notices in the present case were mailed on June 10, 1927, and August 17, 1927.
The Revenue Act of 1926, enacted February 26, 1926, provides in part as follows:
SEC. 274. (a) If in the case of any taxpayer, the Commissioner determines that there is a deficiency in respect of the tax imposed by this title, the Commissioner is authorized to send notice of such deficiency to the taxpayer by registered mail. Within 60 days after such notice is mailed (not counting Sunday as the sixtieth day), the taxpayer may file a petition with the Board of Tax Appeals for a redetermination of the deficiency. * * *
(e) The Board shall have jurisdiction to redetermine the correct amount of the deficiency even if the amount so redetermined is greater than the amount of the deficiency, notice of which has been mailed to the taxpayer, and to determine whether any penalty, additional amount or addition to the tax should be assessed, if claim therefore is asserted by the Commissioner at or before the hearing or rehearing.
(f) If after the enactment of this Act the Commissioner has mailed to the taxpayer notice of a deficiency as provided in subdivision (a), and the taxpayer files a petition with the Board within the time prescribed in such subdivision, the Commissioner shall have no right to determine any additional deficiency in respect of the same taxable year, except in the case of fraud, and except as provided in subdivision (e) of this section or in subdivision (c) of section 279. * * *
SEC. 283. (a) If after the enactment of this Act the Commissioner determines that any assessment should be made in respect of any income, war-profits, or excess-profits tax imposed by the Revenue Act of 1916, the Revenue Act of 1917, the Revenue Act of 1918, the Revenue Act of 1921, or the Revenue Act of 1924, or by any such Act as amended, the Commissioner is authorized to send by registered mail to the person liable for such tax notice of the amount proposed to be assessed, which notice shall, for the purposes of this Act, be considered a notice under subdiv...
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