Morefield v. Commissioner

*395OPINION.

Lansdon:

The petitioners ash for redetermination of an over-assessment for the calendar year 1919, and of a deficiency for the calendar year 1920. The first question to be considered is whether the Board has jurisdiction that enables it to redetermine the tax liability of a taxpayer ivho has been advised of an overassessment for the year involved.

Prior to the enactment of the Revenue Act of 1926, we held, in the Appeal of E. J. Barry, 1 B. T. A. 156, that—

Where the Commissioner determines after June 2, 1924, that an assessment should be made in respect of the tax imposed by prior revenue acts in the amount of a deficiency in one year less an overpayment in another year, the Board has jurisdiction to consider the appeal as to both years and determine the correctness of the deficiency asserted.

In the Appeal of the Eagle Dye Works, 1 B. T. A. 638, we held that—

In an appeal fnom a deficiency in any year this Board has jurisdiction to consider the tax liability for any other year not barred by the statute of limitations when necessary to a correct determination of the deficiency asserted.

The jurisdiction taken in the appeals cited supra, even if such reports might be construed to assert authority to redetermine over-assessments, appears to have been completely destroyed by the enactment of the Revenue Act of 1926, which defines a deficiency and *396sets forth the jurisdiction of the Board thereof in the following language:

Sec. 273. As used in this title in respect of a tax imposed by this title the term “ deficiency ” means—
(1) The amount by which the tax imposed by this title exceeds the amount shown as the tax by the taxpayer upon his return; but the amount so shown on the return shall first be increased by the amounts previously assessed (or collected without assessment) as a deficiency, and decreased by the amounts previously abated, credited, refunded, or otherwise repaid in respect of such tax; * * *.
Sec. 274. (a) If in the ease 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 CO 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. * * *
(g) The Board in redetermining a deficiency in respect of any taxable year shall consider such facts with relation to the taxes for other taxable years as may be necessary correctly to redetermine the amount of such deficiency, but in so doing shall have no jurisdiction to determine whether or not the tax for any other taxable year has been overpaid or underpaid.

From these excerpts from the statute that clothes the Board with all the jurisdiction that it may exercise, we conclude that it was the plain intent of Congress to restrict our authority to the redetermination of deficiencies asserted by the Commissioner. We may consider facts relating to tax liability of years for which no deficiency is asserted only as such facts affect tax liability for the year for which a deficiency has been found. In order that there may be no further controversy as to our authority in the matter of tax liability for years in which no deficiency is asserted, Congress has now declared, in express terms, that we have no jurisdiction to determine whether the tax for any year in which no deficiency has been asserted has been either overpaid or underpaid. We are of the opinion that this provision also denies us any authority either to increase or decrease an overassessment for any year in which no deficiency has been found. We hold, therefore, that in the case at bar we-have no jurisdiction to enable us to redetermine the overassessment for the year 1919. Appeal of Cornelius Cotton Mills, 4 B. T. A. 255; Appeal of R. P. Hazzard Co., 4 B. T. A. 150.

The evidence that the petitioners sustained a loss in the amount of $14,250 in 1920 as the result of certain transactions in buying and selling oil leases is clear and uncontradicted. Such loss should be deducted from the gross income for that year.

Order of redetemdnation will be entered on 15 days'1 notice, under Rule 50.