Shanley v. Commissioner of Internal Revenue, Docket No. 8452.
| Decision Date | 24 June 1927 |
| Docket Number | Docket No. 8452. |
| Citation | 7 BTA 521 |
| Parties | WILLIAM C. SHANLEY, JR., MARY REGIS SHANLEY, AND BERNARD M. SHANLEY, II, EXECUTORS, ESTATE OF WILLIAM C. SHANLEY, PETITIONERS, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. |
| Court | U.S. Board of Tax Appeals |
Paul Armitage, Esq., and Edward Halloway, Esq., for the petitioners.
George G. Witter, Esq., for the respondent.
This proceeding was heard on its merits and on respondent's motion to dismiss on the ground that no deficiency had been determined for 1922, the year involved.
FINDINGS OF FACT.
The petitioners are the executors of the estate of William C. Shanley, who died December 28, 1922. In March, 1923, William C. Shanley, Jr., as executor of William C. Shanley, deceased, filed on Form 1040 with the Collector of Internal Revenue, Second District of New York, an individual income-tax return for the decedent for the year beginning January 1, 1922, and ending at the date of the death of said decedent. In this return he reported as gross income of the decedent for said period, the sum of $121,366.14. He reported as deductions $19,372.09, and as net income, $101,994.05. He further reported as the total tax due, $26,211.22. Thereafter, and on March 19, 1923, the executor voluntarily paid to the collector $11,211.22, leaving unpaid the sum of $15,000.
On June 15, 1923, William C. Shanley, Jr., as executor, as aforesaid, filed with the Collector of Internal Revenue for the Second District of New York, an amended return on Form 1040, for the same period, in which he reported as gross income of said decedent for said period, $85,662.14; as deductions $11,354.46, and as net income, $74,307.68. He further reported as the total tax due for said period, $12,486.15. On a date not shown, he filed with the collector a claim for the abatement of the tax of said decedent in the sum of $15,000, and also a claim for credit in the sum of $2,513.85. The respondent allowed the claim for abatement to the extent of $145.61, and determined the tax to be $26,065.61. The petitioners brought this proceeding, asserting that in so far as respondent determined the tax to be in excess of $12,486.15, he determined a deficiency.
At the hearing of this proceeding on its merits, the respondent orally moved to dismiss the petition, on the ground that he had not determined a deficiency, but on the other hand, had determined the tax to be $145.61 less than the amount reported by the petitioners in their return filed in March, 1923. The presiding member took the motion under consideration and permitted both petitioners and respondent to present their evidence. In view of the conclusion we have reached, only the question of jurisdiction will be discussed.
The Board of Tax Appeals is a tribunal of limited jurisdiction and possesses only such powers as are vested in it by statute. Appeal of Clois L. Greene, 2 B. T. A. 148. Jurisdiction can not be conferred on the Board by the parties, either by their affirmative or negative action. Appeal of Southern California Loan Association, 4 B. T. A. 223. Since the Board has no jurisdiction other than that conferred upon it by statute, and since any finding made in a proceeding over which it has no jurisdiction would be coram non judice, it is the duty of the Board, even where the question is not raised by the respondent, to dismiss the proceeding on its own motion. Appeal of Frost Superior Fence Co., 1 B. T. A. 1096; Appeal of A. H. Stange, 1 B. T. A. 810. It, therefore, becomes our duty to decide whether the Board has jurisdiction over this proceeding.
In the income-tax return filed by petitioners in March, 1923, they returned as income of the decedent, all the gross income to which he was entitled under the will of his father, Bernard M. Shanley, including so much thereof as was paid to the Empire Trust Co. as trustee under a trust alleged to have been created by William C. Shanley, Sr., and further included as deductions, certain items which they now allege should have been taken as deductions by the Trust Company. The amended return filed on June 15, 1923, eliminated these items. It is claimed by the petitioners that the first return was erroneous; that the second return was the only return that reflected the true income of the decedent, and, therefore, that any income determined by the respondent in excess of the amount shown to be due by the last return, is a deficiency, which this Board has jurisdiction to redetermine.
It should be observed at the outset that the return filed by the petitioners in March, 1923, was in no sense a tentative return. It was a full and complete return, item by item, of both income and deductions. Nor was there any accompanying protest to show that petitioners did not consider that the whole tax reported was lawfully due. They voluntarily paid at once more than the one-fourth of the tax which they were permitted to pay at the time of filing their return. There is nothing in the record which brings this proceeding within the rules laid down in Appeal of Continental Accounting & Auditing Co., 2 B. T. A. 761, and Appeal of Matteawan Manufacturing Co., 4 B. T. A. 953.
The question presented is governed by the opinions of the Board in Appeal of New York Trust Co. et al., Executors, 3 B. T. A. 583, and E. L. Harris v. Commissioner, 5 B. T. A. 1026. The facts in Appeal of New York Trust Co., et al., Executors, are concisely stated by the Board, as follows:
Stripped to their essential elements, the facts are: The executors made a return of income and tax thereon. Thereafter, they discovered what they insist was error in that they included an item as income which was not income. They filed claims for refund and abatement, supported by an amended return showing the income, and the tax thereon, in a lesser amount. After certain conferences were held, the Commissioner rejected the claims and determined the tax to be as reported by the executors in the returns originally filed by them.
In that proceeding it was said:
The Commissioner is now proposing to collect the exact amount shown as the tax upon the return as filed by the executors; hence, it can not be said there is a proposal to collect a deficiency in tax, as defined in section 273, above quoted.
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