*76 Decision will be entered under Rule 50.
Upon advice of counsel that it was not an association taxable as a corporation, petitioner refused to file capital stock tax returns and in August 1937 a deputy collector filed delinquent returns under section 3176 of the Revised Statutes. Following judicial determination that it was taxable as a corporation, petitioner in December 1942, and after the institution of this proceeding, tendered for filing delinquent amended capital stock tax returns increasing capital stock values declared by respondent for 1936 and 1937, the effect of which was to eliminate the excess profits tax liability determined by respondent for 1937. Held, petitioner is not entitled to amend the returns filed by the deputy collector or to substitute its own delinquent returns therefor.
*630 This proceeding involves income and excess profits tax deficiencies for the years and in the amounts following:
| Excess profits | ||
| Year | Income tax | tax |
| 1937 | $ 9,904.15 | $ 1,535.59 |
| 1938 | 4,252.59 | |
| 1939 | 4,993.28 |
All issues but one have*77 been stipulated or waived. The stipulations, hereinafter set forth, will be taken into consideration in redetermining the deficiencies under Rule 50. The issue remaining for determination is whether respondent erred in using a capital stock value of $ 500,000 in computing petitioner's excess profits tax liability for 1937, petitioner having subsequently tendered for filing a delinquent capital stock tax return showing an adjusted declared capital stock value for 1937 of $ 783,032.12.
FINDINGS OF FACT.
The petitioner is an express trust created in or about 1934 under the laws of the State of Oklahoma, with its principal office at Tulsa, Oklahoma. Its returns for the periods here involved were filed with the collector of internal revenue at Oklahoma City, Oklahoma.
Petitioner originally filed fiduciary income tax returns for all years from its organization to and including the taxable year 1939. It filed no corporation income tax returns and no timely capital stock tax returns for those years. This procedure was followed upon the advice of counsel that it was not an association within the meaning of the revenue laws and was under no obligation to file corporate returns nor to pay*78 a corporate tax.
In 1936 a revenue agent examined petitioner's books and records for 1934. Upon the basis of the agent's report the respondent determined that petitioner was an association taxable as a corporation and determined a deficiency in income tax for 1934. Petitioner appealed this determination, but respondent was affirmed, , decided April 9, 1940. On March 9, 1942, the Circuit Court of Appeals for the District of Columbia affirmed the Board in , and on October 12, 1942, certiorari was denied by the Supreme Court, .
On August 18, 1937, a deputy collector, acting under authority of section 3176 of the Revised Statutes, prepared and filed delinquent capital stock tax returns for petitioner for the years 1934 to 1937, inclusive. Each of said returns set out a declared or adjusted declared value of $ 500,000.
Before preparing and filing said capital stock tax returns the deputy collector called upon petitioner and requested it to file the returns for *631 said years. The trustees*79 of the petitioner, upon the advice of counsel, refused to file capital stock tax returns because such returns might be construed as admissions that the trust was an association, a question which at that time was a matter of litigation between petitioner and respondent. Being unable to procure capital stock tax returns from petitioner, the deputy collector prepared and filed the returns above mentioned from audit reports of the petitioner and certain other records before him. All of petitioner's records were placed at his disposal and no information which he desired was denied him. In declaring the value of petitioner's capital stock, as reflected in each of said returns, the deputy collector used the value of $ 500,000, which is equal to the issue value of 5,000 units of beneficial interests. Said units were issued (and sold by dealers) for $ 100 per unit, or a total of $ 500,000, of which petitioner received only $ 400,000.
The 1937 capital stock tax return prepared and filed by the deputy collector reflected the same value as the 1936 capital stock tax return prepared and filed by him. Typed on said return is the following statement:
NO ADJUSTMENTS -- TAXPAYER FILED INCOME*80 TAX RETURNS AS A FIDUCIARY -- ENTERING LITIGATION PROTESTING COMMISSIONER'S RULING AS TO BEING TAXABLE AS AN ASSOCIATION.
The deputy collector made no adjustment to the 1936 declared value in the 1937 return, principally because the information and data necessary for such adjustment are found in the corporate income tax returns, which returns had not been filed by the petitioners.The capital stock taxes reflected in the returns filed by the deputy collector for the years 1934 to 1937, inclusive, were assessed against and paid by petitioner, together with penalties and interest. The amount of the capital stock tax shown on the return for each of said years was $ 500.
After the United States Supreme Court denied certiorari in petitioner's 1934 income tax case (October 12, 1942), petitioner prepared capital stock tax returns for all years upon the basis that it was an association taxable as a corporation. These returns were delivered to the office of the collector of internal revenue. Petitioner's returns for 1936 and 1937 stated a declared value of capital stock of $ 800,000 for 1936 and an adjusted value for 1937 of $ 783,032.12. The 1937 return was marked "AMENDED" and was*81 received by the collector on or about December 8, 1942, but was not accepted as a return. Petitioner tendered its check in the amount of $ 583 to the collector in payment of the additional tax shown by its 1936 and 1937 capital stock tax returns, i. e., $ 300 for 1936 and $ 283 for 1937. This remittance was placed in the collector's suspense account to be later refunded to petitioner.
*632 The present proceeding involving an excess profits tax deficiency for 1937 was pending at the time petitioner prepared its capital stock tax returns for 1936 and 1937. The capital stock value declared by petitioner for 1936 is sufficient, after making the necessary adjustments for 1937, to eliminate the excess profits tax determined by respondent based on his determination of petitioner's 1937 net income. The information upon which petitioner's 1937 adjustments were based was prepared by petitioner within the last two or three years in connection with preparation for hearing in this proceeding. In determining the excess profits tax deficiency for 1937 respondent used an adjusted declared value of $ 500,000 for petitioner's capital stock.
It is stipulated that for 1937 petitioner is entitled*82 to a deduction of $ 889.08 for depreciation in addition to the amount of depreciation allowed for that year in the statutory notice of deficiency.
It is stipulated that the correct deficiencies in income tax for the taxable years 1938 and 1939 are the respective amounts of $ 3,195.37 and $ 4,276.86.
OPINION.
The respondent determined petitioner's excess profits tax liability for 1937 upon the basis of a capital stock value declared in a delinquent return filed by a deputy collector under section 3176 of the Revised Statutes. Petitioner seeks to increase respondent's $ 500,000 valuation by an "amended" return in which it declared a value for capital stock tax purposes of $ 783,032.12. If petitioner is entitled as a matter of law to "amend" the return filed by the deputy collector, or to have the 1936 capital stock tax return delivered to the collector in December 1942 considered as its "first return" under the statute and this declared value adjusted for the subsequent year as provided in section 105 (f) of the Revenue Act of 1935, then there will be no excess profits tax deficiency for 1937, as 10 percent of the adjusted declared value of petitioner's capital stock will exceed its*83 1937 net income as determined by the respondent.
It is contended by petitioner that the only material difference between this case and , is that in the latter case both capital stock tax returns were timely filed, while here both returns were filed out of time. It is urged that if a timely return can be corrected by a second timely return, a return filed out of time can likewise be corrected by a second untimely return, especially where the petitioner did not file the first delinquent return. Petitioner distinguishes , and , because in those cases timely capital stock tax returns were filed and amended returns offered out of time were refused. Petitioner also cites , reversing in part *633 and affirming in part , where the taxpayer filed a capital stock tax return just five days before the Board*84 heard the case on the merits to determine whether taxpayer was an association subject to income and excess profits taxes as a corporation, and , which followed the Haggar and Del Mar Addition cases, supra.
We have carefully examined petitioner's contentions in the light of the authorities cited and the facts here presented. It is our opinion, however, that the 1937 capital stock tax return filed by the deputy collector must stand as petitioner's return. Every opportunity was afforded petitioner to file the required returns and to declare a value for its capital stock, but it was adamant in its belief that it was a trust and not an association taxable as a corporation. Since it now concedes that it is an association, , capital stock tax returns were required to be filed. As pointed out by the court in , a "taxpayer takes a severe risk if it permits the collecter to make his own computation and return * * *." Here, the taxpayer accepted the risk when it persisted in its*85 belief that it was not taxable as a corporation. After certiorari was denied by the Supreme Court in October 1942, it tendered for filing returns declaring a value for capital stock tax purposes which it now seeks to have accepted. But long prior thereto the collector had filed returns for petitioner as he was required to do by section 3176 of the Revised Statutes, as amended. It is now too late to amend the collector's return or to substitute petitioner's declaration for that of the collector. .
Petitioner recognizes, as it must, that the last cited case is directly opposed to its contention. It is urged, in opposition thereto, that the holding denies a taxpayer the privilege of fixing its capital stock value for tax purposes and is inconsistent with the provisions for amendment of a deputy collector's return provided for in section 3176 of the Revised Statutes. As to the first argument it is sufficient to point out that petitioner refused to exercise the privilege when requested to do so by the deputy collector, who thereupon made a binding election for petitioner. ;*86 ; ; .
The second objection to the Lee H. Marshall Heirs case, supra, namely, that the deputy collector's return can be amended, is not well founded. Section 3176 of the Revised Statutes, as amended, provides in part that, in case of a return made by a collector or deputy collector, the "Commissioner of Internal Revenue may, from his own knowledge, and from such information as he can obtain through testimony or otherwise, make a return or amend any return made by a collector *634 or deputy collector." (Italics supplied.) We can not believe that Congress intended by this language to throw wide the door to any delinquent taxpayer to amend a return filed by the collector or deputy collector under section 3176. The right to amend is granted to the "Commissioner of Internal Revenue," but no such right is granted to a taxpayer who has failed to file a return at the time required by law.
One other argument advanced by petitioner merits comment. It is urged that respondent used *87 the wrong basis in 1937 because the capital stock value declared for that year is the same as that declared in 1936, namely, $ 500,000, whereas section 105 (f) of the Revenue Act of 1935 provides that the 1936 declaration, which was the "first return" within the meaning of said section, should be adjusted in the particulars set forth in section 105 (f). Respondent concedes that he made no adjustments of the 1936 value in arriving at the declared value for 1937, but points out that if the adjustments shown in petitioner's 1937 "amended" return are correct, the 1937 adjusted declared value would be even less than he has determined. Respondent admits, however, that he is now bound by the determination set forth in the statutory notice of deficiency and he has made no claim that the excess profits tax deficiency should be increased because of his failure to make these adjustments. Obviously, petitioner benefits from respondent's failure; but we can find no basis in that failure to permit petitioner to amend the deputy collector's return or to hold that petitioner's later declaration of value should be substituted for respondent's.
Decision will be entered under Rule 50.