Miller v. Comm'r of Internal Revenue, Docket Nos. 36103

Citation23 T.C. 565
Decision Date31 December 1954
Docket NumberDocket Nos. 36103,36104.
PartiesJOSEPH T. MILLER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.CRYSTAL V. MILLER, PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
CourtUnited States Tax Court

OPINION TEXT STARTS HERE

William M. Goza, Jr., Esq., for the petitioners.

James R. Harper, Jr., Esq., for the respondent.

1. By reason of a net operating loss deduction from a loss incurred in 1948, the respective petitioners received tentative abatements of their income taxes assessed for the taxable year 1946, before the renegotiation tax credit under section 3806 applicable to 1946 was applied. Because the abatements were in excess of the amounts properly allowable, the respondent determined deficiencies which petitioners allege are contrary to the definition of a deficiency contained in section 271 of the Internal Revenue Code of 1939.

Held, the method used by the respondent in his determination of the respective deficiencies is approved. Morris Kurtzon, 17 T.C. 1542, followed.

2. The respondent filed tax liens for the unpaid income taxes assessed for 1946. On the abatement of such taxes certificates of discharge of tax liens were issued. Petitioners allege that by reason of the issuance of such certificates the respondent is estopped from thereafter determining a deficiency.

Held, on the facts, that petitioners have not established a basic for an estoppel.

These consolidated proceedings involve income tax deficiencies for 1946 as follows:

+-----------------------------+
                ¦Joseph T. Miller  ¦$26,023.42¦
                +------------------+----------¦
                ¦Crystal V. Miller ¦25,814.42 ¦
                +-----------------------------+
                

In the deficiency notices the respondent computed the respective deficiencies as follows:

+----------------------------------------------------------------------------+
                ¦                                                   ¦Joseph T.  ¦Crystal V.  ¦
                +---------------------------------------------------+-----------+------------¦
                ¦                                                   ¦Miller     ¦Miller      ¦
                +---------------------------------------------------+-----------+------------¦
                ¦Tax assessed per original return                   ¦$57,532.60 ¦$57,945.85  ¦
                +---------------------------------------------------+-----------+------------¦
                ¦Less: Contract renegotiation tax credit under sec. ¦           ¦            ¦
                +---------------------------------------------------+-----------+------------¦
                ¦3806 (b), I.R.C.                                   ¦48,041.09  ¦48,174.09   ¦
                +---------------------------------------------------+-----------+------------¦
                ¦                                                   ¦           ¦            ¦
                +---------------------------------------------------+-----------+------------¦
                ¦                                                   ¦9,491.51   ¦9,771.76    ¦
                +---------------------------------------------------+-----------+------------¦
                ¦Less: Refund allowable due to operating loss carry-¦           ¦            ¦
                +---------------------------------------------------+-----------+------------¦
                ¦back                                               ¦9,491.51   ¦9,771.76    ¦
                +---------------------------------------------------+-----------+------------¦
                ¦                                                   ¦           ¦            ¦
                +---------------------------------------------------+-----------+------------¦
                ¦Net tax assessed                                   ¦           ¦            ¦
                +---------------------------------------------------+-----------+------------¦
                ¦Refund allowed on tentative allowance              ¦35,514.93  ¦35,586.18   ¦
                +---------------------------------------------------+-----------+------------¦
                ¦Allowed as set out above                           ¦9,491.51   ¦9,771.76    ¦
                +---------------------------------------------------+-----------+------------¦
                ¦                                                   ¦           ¦            ¦
                +---------------------------------------------------+-----------+------------¦
                ¦Deficiency                                         ¦$26,023.42 ¦$25,814.42  ¦
                +----------------------------------------------------------------------------+
                

The issues presented are (1) whether the respondent properly computed the deficiencies, and (2) whether the respondent should be estopped from asserting deficiencies.

FINDINGS OF FACT.

Petitioners are husband and wife. Their individual income tax returns for 1946 were filed with the collector of internal revenue for the district of Florida, at Jacksonville.

During the years 1946, 1947, and 1948, petitioners were partners in the construction business. In their respective returns each petitioner reported taxable net income in the amount of $93,230.61. Petitioner Joseph T. Miller's return discloses a tax liability of $57,532.60, and Crystal V. Miller's return shows a liability of $57,945.83. Each return claimed a payment of $10,000 as the result of a joint declaration of estimated tax and a payment of $20,000. No additional payment having been made at the time of filing the respective returns, the respondent filed tax liens as follows:

+------------------------------------------------+
                ¦Petitioner       ¦Tax       ¦Interest¦Total     ¦
                +-----------------+----------+--------+----------¦
                ¦Joseph T. Miller ¦$47,532.60¦$907.87 ¦$48,440.47¦
                +-----------------+----------+--------+----------¦
                ¦Crystal V. Miller¦47,945.85 ¦915.77  ¦48,861.62 ¦
                +------------------------------------------------+
                

By subsequent payments Joseph T. Miller reduced his liability for 1946 by the amount of $14,176.91, and Crystal V. Miller by the amount of $14,176.90. As of December 30, 1948, the taxes and interest assessed and unpaid against Joseph T. Miller were in the amount of $34,263.56, and against Crystal V. Miller, in the amount of $34,684.74.

The income tax return for each petitioner filed for the year 1948 reflected a net loss of $47,278.06. On January 3, 1949, each petitioner filed an application on Form 1045 for a tentative carry-back adjustment. On March 18, 1949, the unpaid assessments of income taxes for 1946 were abated on the records of the collector of internal revenue for the district, and each petitioner received a notice of allowance of such abatement. On March 21, 1949, a ‘Certificate of Discharge of Tax Lien(s) Under Internal Revenue Laws,’ Form 669, was issued to each of the petitioners, and the liens were removed. The applications on Form 1045 for the tentative carry-back adjustments were filed to get prompt action upon the release of the liens.

On June 24, 1948, the War Contracts Price Adjustment Board determined unilaterally that the partnership of petitioners had excessive profits of $135,000.

In December 1949,...

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  • Estate of Goodall v. CIR
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
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    ...the deficiency. The relevant authorities, with one exception, are to this effect. Morris Kurtzon, 17 T.C. 1542 (1952); Joseph T. Miller, 23 T.C. 565 (1954), aff'd Miller v. Commissioner of Internal Revenue, 231 F.2d 8 (5 Cir. 1956), where the court stated, p. 9, "We find ourselves in full a......
  • Nickerson v. Comm'r of Internal Revenue (In re Estate of Wilbanks)
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    ...subsequently determining a deficiency in or addition to tax. Cf. Parks v. Commissioner, 33 T.C. 298, 301-302 (1959); Miller v. Commissioner, 23 T.C. 565, 568 (1954), affd. 231 F.2d 8 (5th Cir. 1956). Moreover, we will not normally look behind the notice of deficiency to examine the administ......
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