*2059 1. The taxpayer, a corporation organized under the laws of the State of Maine, engaged in business in Wisconsin, transferred all its assets, the most of which were located in Wisconsin, to the petitioner. Thereafter the courts of Maine decreed that the taxpayer be dissolved. Under the laws of Maine, the taxpayer remained in existence for three years for the purpose of liquidation. After the expiration of the three-year period agreements were executed purporting to waive the statute of limitation with regard to the taxpayer's liability for taxes for a year prior to dissolution. Held, that such waivers are invalid, and that assessment and collection against and from both the taxpayer and the petitioner, as transferee, are barred by the statute of limitation.
2. Held, upon the evidence, that petitioner is not estopped to deny the validity of the purported waivers.
*833 This is a proceeding for the redetermination of the petitioner's liability, if any, as a*2060 transferee of the assets of the Newport Chemical Works, Inc., for the income and profits taxes of that corporation for the calendar year 1917, claimed by the respondent to be *834 due in the amount of $43,527.25. In a letter dated March 14, 1927, the respondent proposed to assess the full amount of $43,527.25 against the petitioner.
In the amended petition it is alleged that the respondent erred in his determination as follows:
(1) In failing to take into account as an offset against such claimed liability claims for refund against the Government to which, as petitioner is informed and believes, it is entitled in an amount sufficient to offset and cancel said sum of $43,527.25, if the petitioner is liable for said sum as a transferee of the assets of said Newport Chemical Works, Inc.;
(2) In disallowing as a deduction from taxable income the sum of $15,891.72 as organization expenses on the ground that this amount was deducted by taxpayer from its income in 1917, whereas $11,335.69 of this amount was never deducted by taxpayer from its income, with the result that said sum of $11,335.69 has been erroneously added by the Department to the taxpayer's taxable income for*2061 the year 1917; and
(3) Because the right of the Commissioner to make such proposed assessment or to enforce the same against the petitioner or said the Newport Chemical Works, inc. at the time such determination was made was barred by the statute of limitations applicable thereto.
In an amendment to the amended petition the petitioner asserts that section 280 of the Revenue Act of 1926 is in violation of section 1 of Article III of the Constitution of the United States and of Article V of the amendments to the Constitution.
In his amended answer to the amended petition and to the amendment to the amended petition the respondent alleged that though the notice to the petitioner of the determination of its liability for the taxable year 1917 was not mailed until March 14, 1927, the assessment and/or collection thereof from the petitioner as transferee of the assets of the Newport Chemical Works, Inc. is not barred by the statute of limitations for the reason that both the Newport Chemical Works, Inc. and the petitioner as transferee and Successor in interest to the Newport Chemical Works, Inc. had, prior to the mailing of the notice of March 14, 1927, each consented in writing, *2062 as provided by law, to the making of the assessment and the collection of the taxes involved within the time of the proposed determination, which consent had been accepted in writing by the respondent. The respondent further alleged that the petitioner assured respondent that the waivers which petitioner executed on its own behalf and on behalf of the Newport Chemical Works, Inc. were executed with full authority, and that petitioner is now estopped to deny the validity of the waivers.
*835 At the hearing the respondent admitted that he erred as alleged in assignment of error (2) and the petitioner abandoned the first assignment of error.
FINDINGS OF FACT.
The petitioner is a corporation duly organized, in 1919, under the laws of Delaware, with its principal place of business at Carrollville, Wis., and with its post-office address, Box 1582, Milwaukee, Wis.
The Newport Chemical Works, Inc. was a corporation organized under the laws of Maine.
For the taxable year 1917, the Newport Mining Company, a Maine corporation, the Newport Chemical Works, Inc., and the Dunn Iron Mining Company were affiliated companies. Both the Newport Chemical Works, Inc. and the Newport*2063 Mining Company were engaged in business in Wisconsin. The Newport Chemical Works, Inc. originally filed a separate income tax return, Form 1031, and a separate excess profits tax return, Form 1103, with the Collector of Internal Revenue at Milwaukee, Wis., on April 1, 1918. The Newport Mining Company and the Dunn Iron Mining Company filed a consolidated excess profits tax return for 1917. At the request of the representatives of the various affiliated companies in the names in which the income and excess profits tax returns were filed, the respondent later determined that the Newport Mining Company, the Dunn Iron Mining Company and the Newport Chemical Works, Inc. were affiliated for the taxable year 1917 for excess-profits-tax purposes only.
In the middle of the year 1919 the Newport Chemical Works, Inc. transferred all its assets to the petitioner in consideration of the issuance by the petitioner of its stock to the stockholders of the Newport Chemical Works, Inc., and in connection with that transfer and as part of the consideration, petitioner assumed all of the liabilities of the Newport Chemical Works, Inc. The value of the assets which were transferred to the petitioner*2064 was materially in excess of the amount of the deficiency in tax claimed in this proceeding. A substantial part of the assets of the Newport Chemical Works, Inc. was located in Wisconsin.
On March 1, 1920, the Supreme Judicial Court of Maine ordered and decreed that the "Newport Chemical Works, Inc. be dissolved without the appointment of a trustee or receiver." On the same date the same court entered a similar order with regard to the Newport Mining Company. Under date of March 8, 1921, there was filed with the Collector of Internal Revenue at Milwaukee, Wis., the income and profits tax return of the Newport Chemical *836 Works, Inc. for the calendar year 1920, which stated on its face "Not active. Dissolved March 1, 1920. Transacted no business whatsoever during year." It showed no income. The letter from the Newport Chemical Works, Inc. accompanying the return stated:
You will note that the company did not operate during the year and hence no net income earned. You will further note that the company's affairs have been wound up and the company legally dissolved.
On or about April 14, 1920, the petitioner filed with the Collector of Internal Revenue, Milwaukee, *2065 Wis., an affiliated corporation questionnaire for the year 1919, which stated that certain companies of the affiliated group, including the Newport Chemical Works, Inc. and the Newport Mining Company, were in the process of dissolution during 1919. This questionnaire stated that the petitioner as principal or parent, the Newport Mining Company, the Newport Chemical Works, Inc. of Maine, and other companies were controlled or owned directly or indirectly by Ferdinand Schlesinger, Mathilda Schlesinger, his wife, Armin A. Schlesinger, his son, Henry J. Schlesinger, his son, and Gertrude MacLaren, his daughter, and that the Schlesingers personally directed the central organization conducting the business in all its activities.
The respondent, by letter dated August 10, 1921, requested certain data in affidavit form in explanation of statements in the affiliated corporation questionnaire for 1919 relating to the dissolution of the corporations. In a letter to the respondent dated August 26, 1921, the petitioner enclosed the affidavit of Frederick R. Wahl, secretary of the petitioner, which stated that the following corporations were dissolved on the following dates:
| The Newport Mining Company | March 1, 1920 |
| Newport Chemical Works, Inc. (Maine) | March 1, 1920 |
| Newport Turpentine & Resin Company, Inc | Oct. 1, 1919 |
| Newport Turpentine & Resin Company of Florida | Sept. 13, 1919 |
| Gogebic Steel Company | June 15, 1920 |
*2066 The affidavit further stated that all of the above named corporations were in process of dissolution from and after July 30, 1919.
The respondent in a letter addressed to the petitioner and dated June 17, 1922, advised petitioner what companies should be included in the consolidated returns for the taxable years 1919 and 1920. This letter stated that the Newport Chemical Works, Inc. should be included up to the date of its dissolution, March 1, 1920. In answer to that letter, the petitioner in a letter dated July 27, 1922, advised the respondent that:
Newport Chemical Works, Inc. (Maine) to date of dissolution, March 1st, 1920, has not been included in the return for 1920 for the reason that this *837 Company transacted no business whatsoever during the year. We have however, filed a separate return and forwarded same to the Collector of Internal Revenue, Milwaukee, under date of March 8th, 1921, and mentioned at that time that the company did not operate during the year and no net income was earned.
The following instrument in writing was executed:
WAIVER
Newport Chemical Works, Incorporated, a corporation organized under the laws of the State of Maine in consideration*2067 of the assurance given it by officials of the Income Tax Unit of the Bureau of Internal Revenue that its liability for all Federal taxes imposed by the Act of Congress, approved September 8, 1916, as amended by the Act of Congress approved October 3, 1917, for the year ended December 31, 1917, on its net income received from all sources in said year, shall not be determined except after deliberate, intensive and thorough consideration, hereby waives any and all statutory limitations as to the time within which assessments based upon such liability may be entered. It is understood, however, that the above corporation does not, by the execution of this waiver, admit in advance the correctness of any assessment which may be made against it for said year by the officials of the Income Tax Unit.
Executed this 15th day of December 1920.
(Signed) NEWPORT CHEMICAL WORKS, INCORPORATED
Corporation
(Seal)
By EDW. G. WILMER
(Title) Vice-President
Approved D. H. BLAIR
A. H. F.Date, Dec. 2, 1922
Commissioner of Internal Revenue
Attest
WILMOT SAEGER
Asst. Secretary
The above instrument is stamped "Received Dec. 18, 1920. Natural Resources Sub-Division. *2068 " It bears the seal of the Newport Chemical Works, Inc., Portland, Maine. The initials under the name "D. H. Blair," are those of A. H. Fay who, on or about December 18, 1920, was head of the Natural Resources Division of the Bureau of Internal Revenue.
The respondent, under date of February 11, 1924, addressed a letter to the Newport Mining Company enclosing form of waivers for the various companies, including the Newport Chemical Works, Inc. This letter stated that the limitation under the statutes for making assessment of income tax for 1917 would expire April 1, 1924, and that because of the limited time for making assessment and collection of any additional tax found due, the Bureau would *838 be unable to give the usual careful consideration without an extension of the period during which assessment might be made.
The following instrument in writing was executed:
(Date)
INCOME AND PROFITS TAX WAIVER
In pursuance of the provisions of subdivision (d) of Section 250 of the Revenue Act of 1921, Newport Chemical Works, Inc., of Milwaukee, Wisconsin, and the Commissioner of Internal Revenue, hereby consent to a determination, assessment, and collection of the amount*2069 of income, excess-profits, or war-profits taxes due under any return made by or on behalf of the said corporation for the year 1917 under the Revenue Act of 1921, or under prior income, excess-profits, or war-profits tax acts, or under Section 38 of the Act entitled "An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes", approved August 5, 1909. This waiver is in effect from the date it is signed by the taxpayer and will remain in effect for a period of one year after the expiration of the statutory period of limitation, or the statutory period of limitation as extended by any waivers already on file with the Bureau, within which assessments of taxes may be made for the year or years mentioned.
(Signed) NEWPORT CHEMICAL WORKS, INC.
Taxpayer
(Seal)
By H. J. SCHLESINGER
Vice President
D. H. BLAIRCommissioner
S.A.
If this waiver is executed on behalf of a corporation, it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sigh for the corporation, in addition to which, the seal, if any, of the corporation*2070 must be affixed.
The above document is marked "Received Feb. 26, 1924. E.D.S. Audit Division." It bears the seal of the Newport Chemical Works, Inc., Portland, Maine. The initials "S.A." under the name "D. H. Blair," are those of Sydney Alexander, who at that time was head of the Special Audit Division of the Income Tax Unit.
The following instrument in writing was executed:
December 23, 1924.
(Date)
INCOME AND PROFITS TAX WAIVER
In pursuance of the provisions of existing Internal Revenue Laws, Newport Chemical Works, Inc., a taxpayer, of Milwaukee, Wisconsin, and the Commissioner of Internal Revenue, hereby consent to extend the period prescribed by law for a determination, assessment, and collection of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of said taxpayer for the year 1917 under the Revenue Act of 1924, or under prior income, excess-profits, or war-profits tax Acts, or under Section 38 of the Act entitled "An Act to provide revenue, equalize duties, and encourage the *839 industries of the United States, and for other purposes", approved August 5, 1909. This waiver is in effect from the date*2071 it is signed by the taxpayer and will remain in effect for a period of one year after the expiration of the statutory period of limitation within which assessments of taxes may be made for the year or years mentioned, or the statutory period of limitation as extended by Section 277(b) of the Revenue Act of 1924, or by any waivers already on file with the Bureau.
(Signed) NEWPORT CHEMICAL WORKS, INC.
Taxpayer
(Seal)
By H. J. SCHLESINGER
Vice-President.
D. H. BLAIRCommissioner
L. T. L.If this waiver is executed on behalf of a corporation, it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sign for the corporation, in addition to which, the seal, if any, of the corporation must be affixed.
The above document bears the stamp "Consolidated Returns Audit Division. Dec. 31, 1924. Asst. Head of Division." It bears the seal of Newport Chemical Works, Inc., Portland, Maine. The initials "L. T. L." beneath the name "D. H. Blair" are those of Louis T. Lohmann, who, in December, 1924, was head of the Consolidated Returns Division of the Bureau of Internal Revenue.
*2072 The following instrument in writing was executed:
Treasury Department
Internal Revenue Service
Form 872 A
INCOME AND PROFITS TAX WAIVER
FOR TAXABLE YEARS ENDED PRIOR TO JANUARY 1. 1922
January 12th, 1926
In pursuance of the provisions of existing Internal Revenue Laws NEWPORT CHEMICAL WORKS, Inc., a taxpayer of Carrollville, Wis., P.O. BOX 1582 Milwaukee, Wis., and the Commissioner of Internal Revenue hereby waive the time prescribed by law for making any assessment of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of said taxpayer for the year (or years) 1917 under existing revenue acts, or under prior revenue Acts.
This waiver of the time for making any assessment as aforesaid shall remain in effect until December 31, 1926, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days, or (2) if an appeal is filed with said Board then said date shall be extended by the number of days between the date of mailing of said*2073 notice of deficiency and the date of final decision by said Board.
(Signed) NEWPORT CHEMICAL WORKS, INC.
Taxpayer
By H. J. SCHLESINGER Vice-President
D. H. BLAIR Commissioner
H. B. R.*840 If this waiver is executed on behalf of a corporation, it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sign for the corporation, in addition to which, the seal, if any, of the corporation must be affixed.
The above document is stamped "Distribution Center. Jan. 20, 1926. Con. Ret. Division." It bears the seal of the Newport Chemical Works, Inc., Portland, Maine. The initials "H. B. R." which appear under the name of D. H. Blair are those of H. B. Robinson, who was head of the Review Division of the Income Tax Unit.
The following instrument in writing was executed:
Treasury Department
Internal Revenue Service
Form 872 (Revised Jan., 1926)
INCOME AND PROFITS TAX WAIVER
For Taxable Years ended prior to January 1, 1923
IT:CR:G-5
Els
Newport Mining Company, Parent.
November 6, 1926
In pursuance of the provisions of existing Internal Revenue*2074 Laws Newport Chemical Works, a taxpayer of Milwaukee, Wisconsin, and the Commissioner of Internal Revenue hereby waive the time prescribed by law for making any assessment of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of said taxpayer for the years 1917 and 1918, period ended June 30, 1919 under existing revenue acts, or under prior revenue acts.
This waiver of the time for making any assessment as aforesaid shall remain in effect until December 31, 1927, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days, or (2) if an appeal is filed with said Board then said date shall be extended by the number of days between the date of mailing of said notice of deficiency and the date of final decision by said Board.
(Signed) THE NEWPORT COMPANY
Taxpayer
By A. A. SCHLESINGER
President
(Seal)
As successors in Interest to the
NEWPORT CHEMICAL WORKS.
D. H. BLAIR,Commissioner.
A. B. N.If this waiver*2075 is executed on behalf of a corporation, it must be signed by such officer or officers of the corporation as are empowered under the laws of the State in which the corporation is located to sign for the corporation, in addition to which, the seal, if any, of the corporation must be affixed.
The above document bears the stamp "Nov. 10, 1926. Asst. head of Division." It bears the seal of The Newport Company. The *841 initials "A.B.N." appearing under the name "D. H. Blair" are those of Albert B. Niess, who, on or about November 10, 1926, was assistant head of the Records Division of the Income Tax Unit.
The following instrument in writing was executed:
December 11, 1923.
(Date)
Reference Symbols I. T:NT:G-EFS-5
INCOME AND PROFITS TAX WAIVER
In pursuance of the provisions of subdivision (d) of Section 250 of the Revenue Act of 1921, The Newport Mining Company of Maine with its principal office at Milwaukee, Wisconsin, and the Commissioner of Internal Revenue, hereby consent to a determination, assessment, and collection of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of the said company for the year 1917*2076 under the Revenue Act of 1921, or under prior income, excess-profits, or war-profits tax Acts, or under Section 38 of the Act entitled "An act to provide Revenue, equalize duties, and encourage the industries of the United States, and for other purposes", approved August 5, 1909. This waiver to be effective until March 15, 1925, and applies to said The Newport Mining Company and affiliated companies included in the letter of the department dated August 13, 1923 with reference symbols I. T:NR:G-EFS-5.
(Signed) THE NEWPORT MINING COMPANY
Taxpayer
By H. J. SCHLESINGER Vice-President
D. H. BLAIRA
It bears the stamp "Received Dec. 15, 1923. Natural Resources Division." It bears no seal. The initial "A" which appears under the name "D. H. Blair" is that of Sydney Alexander, who on or about December 15, 1923, was head of the Special Audit Division of the Income Tax Unit.
At the date of the dissolution of the Newport Chemical Works, Inc., E. G. Wilmer and H. J. Schlesinger were two of its vice presidents. A. A. Schlesinger was president at that time. He was also a director of the petitioner at the time of its organization.
In a letter dated March 14, 1927, the*2077 respondent informed the petitioner as follows:
As provided in Section 280 of the Revenue Act of 1926, there is proposed for assessment against you the amount of $43,527.25 constituting your liability as a transferee of the assets of the Newport Chemical Works, Milwaukee, Wisconsin, for income and profits taxes in the amount of $43,527.25 due from The Newport Chemical Works for the year 1917 as shown in the attached statement.
* * *
In a letter addressed to the Newport Mining Company, dated August 13, 1923, relative to the liability of that company and its affiliated companies, the Newport Chemical Works, Inc., and the *842 Dunn Iron Mining Company, notice was given of the respondent's determination of additional taxes against those companies. It contains the statement "Waivers for 1917 are on file in this office."
The Newport Mining Company, by Charles F. Fawsett, its general counsel, in October, 1923, filed an appeal with the respondent in behalf of itself and affiliated companies, from the proposed deficiency determinations as set forth in the respondent's letter of August 13, 1923, and requested redetermination for the year 1917 and prior years. The appeal concludes*2078 with the following statement:
This appeal is taken by the Newport Mining Company for and in behalf of each of the subsidiary and affiliated companies named in said letter of the Department of August 13, 1923, as well as on its own behalf, and it is duly authorized to take such appeal.
(Signed)
THE NEWPORT MINING COMPANY
By CHARLES FAWSETT,
General Counsel.
In a letter of December 3, 1924, addressed to Newport Chemical Works, Inc., 1112 First National Bank Building, Milwaukee, Wisconsin, the respondent stated: "Waiver for the year 1917 filed February 26, 1924, expires April 1, 1925." Thereafter a protest was filed on December 27, 1924, by the Newport Mining Company and the Dunn Iron Mining Company, in which they protested against the determination of the respondent that the Newport Chemical Works, Inc. was not affiliated with the Newport Mining Company. The protest contains the following statement:
The taxpayers hereby place upon record their willingness to file all required waivers to permit of the final determination of the above exceptions before the expiration of any period of limitation provided by law and will forthwith transmit such waivers to be filed in*2079 connection herewith as soon as the same can be prepared and properly executed.
Attached to this protest was the following affidavit:
A. A. SCHLESINGER being first duly sworn says that he was during the years 1917 and 1918 the president of the Newport Mining Company and was one of the principal executive officers of the Dunn Iron Mining Company, and as such actively participated in the management of the business and affairs of both of said companies during said years and prior thereto. That he was also vice-president and treasurer of the Newport Chemical Works, Incorporated, during said years and was then and ever since has been familar with the business and affairs of all of said companies, and that he is familar with the facts stated in the foregoing protests and in connection with the exceptions contained therein, and that he makes this verification for and on behalf of all of said companies and particularly on behalf of the Newport Mining Company and the Dunn Iron Mining Company and that he is duly authorized so to do. That he has read said protests and statements made therein and in connection with the foregoing exceptions and that all of such statements are true to the*2080 best of his knowledge, information and belief.
(Signed) A. A. SCHLESINGER,
*843 Under date of December 14, 1925, the respondent wrote a letter to Newport Chemical Works, 1112 First National Bank Building, Milwaukee, Wisconsin, proposing another redetermination for the year 1917. Therein it was stated "1917 waiver filed Dec. 31, 1924 is in effect until April 1, 1926."
Under date of January 8, 1926, a protest made by A. A. Schlesinger, purporting to be made on behalf of Newport Chemical Works, Inc., was filed with the respondent, taking exception to the determination contained in the letter of December 14, 1925. It was claimed that respondent erred in failing to hold that Newport Chemical Works, Inc. was affiliated with the Newport Mining Company. The protest concludes with the following statement:
The taxpayer hereby places on record its willingness to file all required waivers to permit of the final determination of the above exceptions before the expiration of any period of limitation provided by law and will forthwith transmit such waivers to be filed in connection herewith as soon as the same can be prepared and properly executed, and in the meantime and pending*2081 the receipt of such formal waivers, it agrees that this offer and agreement shall operate and have the full force and effect of such formal waivers in all respects as though the same were filed herewith.
The above was verified by A. A. Schlesinger, under oath, as follows:
A. A. SCHLESINGER being first duly sworn says that he was during the year 1917 the vice-president and treasurer of the Newport Chemical Works, Inc., and continued as such until May, 1919, and thereafter was the president of the company until its dissolution in the year 1920.
That prior to the dissolution of said company all of its assets and property was transferred to and taken over by the Newport Company, a corporation organized under the laws of Delaware which in consideration thereof assumed and agreed to pay all of the liabilities of said Newport Chemical Works, Inc. and said Newport Company has ever since continued to be the owner of all of such property and assets in so far as the same have been preserved or are still in existence. That this affiant is now president of the Newport Company and is in active charge, management and direction of its affairs.
That he has read the foregoing protest and*2082 exceptions and that the same are true to the best of his knowledge, information and belief.
(Signed) A. A. SCHLESINGER.
The Newport Mining Company, the Newport Chemical Works, Inc., and their successor, the petitioner, as well as some of the other affirliated companies, all maintained offices on the 10th and 11th floors of the First National Bank Building, Milwaukee, Wis. The books of the Newport Chemical Co., Inc. were kept there and its manufacturing plant was located at Carrollvile, Wis., which is near Milwaukee.
OPINION.
MCMAHON: At the hearing the petitioner abandoned the first assignment of error and the respondent admitted that he erred as *844 alleged in the second assignment of error. The petitioner undertakes to question the constitutionality of section 280 of the Revenue Act of 1926, but having invoked that section to secure a redetermination, it may not question its validity. Henry Cappellini et al.,14 B.T.A. 1269">14 B.T.A. 1269. See also Phillips v. Commissioner of Internal Revenue, 42 Fed.(2d) 177.
The remaining contention of the petitioner is that assessment and collection of its liability as a transferee of the assets*2083 of the Newport Chemical Works, Inc. for income and profits taxes of the latter company for the year 1917 are barred by the statute of limitations. We must first determine if assessment of the tax liability of the Newport Chemical Works, Inc. is barred by the statute of limitations and if so, when such assessment became barred. Section 250(d) of the Revenue Act of 1921 provides, in part:
(d) The amount of income, excess-profits, or war-profits taxes due under any return made under this Act for the taxable year 1921 or succeeding taxable years shall be determined and assessed by the Commissioner within four years after the return was filed, and the amount of any such taxes due under and return made under this Act for prior taxable years or under prior income-excess-profits, or war-profits tax Acts, or under section 38 of the Act entitled "An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes," approved August 5, 1909, shall be determined and assessed within five years after the return was filed, unless both the Commissioner and the taxpayer consent in writing to a later determination, assessment, and collection of the*2084 tax; and no suit or proceeding for the collection of any such taxes due under this Act or under prior income, excess-profits, or war-profits tax Acts, or of any taxes due under section 38 of such Act of August 5, 1909, shall be begun, after the expiration of five years after the date when such return was filed, but this shall not affect suits or proceedings begun at the time of the passage of this Act: * * *
The evidence discloses that the income and profits tax return of the Newport Chemical Works, Inc. for the year 1917 was filed on April 1, 1918. In the absence of valid waivers, therefore, the time within which assessment and collection of the tax from the Newport Chemical Works, Inc. could have been made expired on April 1, 1923. However, the respondent has introduced into evidence a number of written instruments which purport to be waivers or consents in writing, which he contends extended the time for making assessment and collection against and from that company, and, that hence the assertion on March 14, 1927, of petitioner's liability under section 280 of the Revenue Act of 1926 was timely.
It is the contention of the petitioner that some of these instruments are invalid*2085 and of no effect because they were executed by a former officer of the Newport Chemical Works, Inc. after that corporation was dissolved.
*845 The evidence shows that on March 1, 1920, the Supreme Judicial Court of Maine ordered and decreed that the "Newport Chemical Works, Inc. be dissolved without the appointment of a trustee or receiver."
Section 89 of chapter 51 of the Revised Statutes of Maine, 1916, provides:
Bill in equity against corporation for dissolution; if no liabilities, dissolution may be had without trustees. R.S. c. 47 § 80. Except where otherwise provided by statute, whenever at any meeting of its stockholders, legally called therefor, such stockholders vote to dissolve such corporation, a bill in equity against the same for dissolution thereof, may be filed by any officer, stockholder or credotor in the supreme judicial court, in the county in which it has an established place of business, or in which it held its last stockholders' meeting; upon said bill, such notice shall be given as may be ordered by any justice of said court, in term time or vacation, and upon proof thereof, such proceedings may be had according to the usual course of suits*2086 in equity, that said corporation shall be dissolved and terminated. Upon proof that there are no existing liabilities against said corporation, and no existing assets thereof, requiring distribution among the stockholders, said court may dissolve said corporation without the appointment of trustees or receivers.
Section 81 of chapter 51 of the Revised Statutes of Maine, 1916, provides:
Existence after charter expires. R.S. c. 47 § 77. Corporations, whose charters expire or are otherwise terminated, have a corporate existence for three years thereafter; to prosecute and defend suits, to settle and close their concerns; to dispose of their property; and to divide their capitals.
The existence of a corporation depends upon the law of the State in which it was incorporated. It therefore appears that under the Statutes of Maine, construed in the most favorable light to the respondent, the Newport Chemical Works, Inc. did not exist after March 1, 1923, for any purpose. See Oklahoma Natural Gas Co. v. Oklahoma,273 U.S. 257">273 U.S. 257.
Prior to that date there was executed what purported to be an unlimited waiver by the Newport Chemical Works, Inc. of the statute*2087 of limitations applicable to its tax liability for the year 1917, but even if valid, this waiver expired on April 1, 1924, in accordance with Mimeograph 3085, which was issued by the Commissioner of Internal Revenue on April 11, 1923. Wirt Franklin,7 B.T.A 636. The remainder of the purported waivers were, so far as evidence shows, executed after the Newport Chemical Works, Inc. had ceased to exist. Respondent, nevertheless, contends that they are valid and serve to waive the statute of limitation as to that company.
Counsel for respondent cites numerous Wisconsin statutes, including sections 226.02 and 226.12 of the statutes of 1925, and sections *846 181.02 and 181.03 of the statutes of 1927, but we find no provision in the statutes of Wisconsin which purports to empower the former officers of any dissolved corporation, foreign, or domestic, to execute valid waivers of the statute of limitations after three years after its dissolution.
The respondent further contends that whether or not the Newport Chemical Works, Inc. was legally dissolved under the laws of Maine, it continued as a de facto corporation in Wisconsin where it was doing business*2088 and in which State most of its assets were located, and that, therefore, the instruments executed under its seal are valid. The respondent states that since the Newport Chemical Works, Inc. entered into agreements with respondent and held itself out as a corporation, the petitioner is precluded from denying the corporate existence of the Newport Chemical Works, Inc. In our opinion this argument is without merit, for the reason that at no time did the petitioner or anyone else, so far as the record shows, represent that the Newport Chemical Works, Inc. was in existence after its dissolution under the laws of Maine. On the contrary, respondent was informed from time to time that the Newport Chemical Works, Inc. had been dissolved.
We must conclude that the purported consents in writing are ineffective to extend the statutory period for assessment and collection against and from the Newport Chemical Works, Inc.
The respondent contends that the petitioner is estopped to deny the validity of the alleged waivers for the reason that it led respondent to believe that these waivers were executed with full authority. However, the evidence discloses that the petitioner on numerous occasions, *2089 prior to the expiration of the statutory period of limitations, informed respondent that the Newport Chemical Works, Inc. had been dissolved. There was, therefore, no deception on the part of the petitioner and petitioner is not estopped to deny the validity of the waivers. Southwestern Investment Co.,19 B.T.A. 30">19 B.T.A. 30.
There is no evidence that assessment of 1917 taxes was ever made against the Newport Chemical Works, Inc. After April 1, 1924, assessment and collection of such taxes against and from the Newport Chemical Works, Inc. were barred by the statute of limitations. Therefore, since assessment and collection of the liability of the taxpayer were barred prior to the passage of the Revenue Act of 1926, assessment and collection of the liability of the petitioner as transferee are also barred. Caroline J. Shaw, Executrix,21 B.T.A. 400">21 B.T.A. 400, and E. N. Ennis et al.,21 B.T.A. 406">21 B.T.A. 406.
Reviewed by the Board.
Judgment will be entered for the petitioner.