*2030 1. For the years 1920, 1921, and 1922, the petition filed with the Board being by one other than the one to whom was mailed the deficiency notice, the Board is without jurisdiction to adjudicate the issues involved.
2. The petitioner having qualified under the holdings of the Commissioner for the year 1923, and met the requirements of section 704 of the Revenue Act of 1928, is held to be entitled to be taxed as a trust for that year.
*486 These proceedings arise through determinations by the Commissioner of deficiencies in taxes for the calendar years 1920, 1921, 1922 and 1923. The respective amounts of the deficiencies determined are:
| 1920 | $8,659.70 |
| 1921 | 1,571.03 |
| 1921 (penalty) | 392.76 |
| 1922 | 772.47 |
| 1923 | 810.96 |
| 12,206.92 |
The respective notices of deficiency were dated February 17, 1926, March 26, 1926, and June 28, 1927. The first two, involving the years 1920, 1921, and 1922, were addressed to "Van Cleave Oil Company," and the third, which involved the year 1923, was addressed*2031 to "Van Cleave Trust." The first two petitions were filed April 16, 1926, the third on August 23, 1927, and all were in the name of the Van Cleave Trust, as petitioner, and were consolidated for hearing and decision.
The cases were submitted and argued on the theory that the three cases present the single question whether or not, under the Revenue Acts of 1918 and 1921 as originally enacted, or as affected by section 704(a) of the Revenue Act of 1928, the Van Cleave Trust, a so-called "Massachusetts common law trust," created in Texas, is taxable, as a trust, only through its cestuis que trustent, or as an association taxable as a corporation.
The facts are not disputed and the petitioner's evidence is uncontradicted. That evidence comprises (1) a deposition with accompanying exhibits of C. H. Lebow taken at Los Angeles, and (2) thirteen other exhibits offered, and the testimony of three other witnesses taken orally at Washington.
*487 FINDINGS OF FACT.
The Van Cleave Trust was created on August 14, 1920, by a declaration of trust executed by Aaron Cohen and C. H. Lebow, as trustees, and recorded in the deed records of Wichita County, Texas. The substance of*2032 that trust agreement, in so far as the same is pertinent to the issue involved herein, is that Aaron Cohen and C. H. Lebow declared themselves the grantees in a certain assignment from the Van Cleave Oil Co., an unincorporated joint stock association which had assigned to those two persons a certain oil and gas lease in block 101, Red River Valley Lands subdivision, together with other property. They further declared and agreed that they and their successors should hold those granted premises in trust for certain persons owning a beneficial interest therein, which interests were to be and were evidenced by certificates of interest issued by said trustees. They further agreed and obligated themselves to convert the assets so taken over by them into money and distribute the same among the beneficiaries in proportion to their several interests, as and when such conversion should be consummated. It was further provided that in the discretion of the trustees such conversion, in whole or in part, might be postponed for any period not longer than 20 years. Pending final conversion and distribution, the trustees had the power and right to manage and control the assets, power to sell, lease, *2033 mortgage, exchange, improve and develop the properties in whole or in part, with as full discretionary powers as though it were their own property. They had full power to collect all claims in favor of the Van Cleave Trust, and pay all claims against it. The beneficiaries in the trust received certificates of interest in proportion to their several beneficial interests in the Van Cleave Oil Co. It was provided that the terms and conditions of the trust instrument might be modified by the trustees if assented to in writing by a majority in the amount of beneficial interests.
A trustee might resign, and any vacancy occasioned by resignation or otherwise, was to be filled by designation by the other trustee.
On the same day, August 14, 1920, the Van Cleave Oil Co. assigned and transferred to the Van Cleave Trust the assets thereafter owned and held by the Van Cleave Trust. The assets so conveyed consisted of an oil and gas lease on 10 acres of land on which one or more producing oil wells were situated, and also some equipment. The Van Cleave Oil Co. was formally dissolved by vote of the shareholders on August 14, 1920.
There exists in the record a mass of evidence tending*2034 to show the nature of the organization, as well as of the operation of the Van Cleave Oil Co. and of the Van Cleave Trust. We deem it necessary here to find only the pertinent conclusions of fact, as follows:
*488 The Van Cleave Oil Co. was an unincorporated joint stock company, and was not a trust as contemplated in section 219 of the Revenue Acts of 1918 and 1921, respectively. The Van Cleave Trust was designed and organized as a trust. The two trustees had full authority to manage, handle, and dispose of the assets as they deemed best without control of the beneficiaries. The primary purpose was to convert the assets into money and distribute that money among the beneficiaries, but they were not precluded from engaging in business activities, and the time limit for conversion and distribution was 20 years, during which time they were authorized to handle those assets in a business way. They did handle those assets in the carrying on of business transactions, as is clearly evidenced by the large expense account (itemized) for each of the years in question as well as by other evidentiary facts.
OPINION.
LOVE: At the hearing of this proceeding it was submitted and*2035 argued by counsel for the petitioner and counsel for the respondent on the hypothesis that the Van Cleave Oil Co. and its successor, the Van Cleave Trust, although different legal entities, nevertheless were in fact one and the same business unit, and therefore, notwithstanding the fact that the deficiencies in taxes for the years 1920, 1921, and 1922 were assessed against the Van Cleave Oil Co., and the deficiency notices mailed to that organization, nevertheless, by reason of the fact that the Van Cleave Oil Co. had not been in existence since August 14, 1920, and the Van Cleave Trust had exercised the management and control of the property and business formerly owned and managed by the Van Cleave Oil Co., and received for itself all the income from said business, the Van Cleave Trust had a right in its own name and behalf to respond to the deficiency notice mailed by the Commissioner to the Van Cleave Oil Co., and defend in this proceeding.
It is clear that the Van Cleave Oil Co. and the Van Cleave Trust are two separate and distinct legal entities, and being such, the situation here is that the entity against which the taxes in question were assessed, and to which the deficiency*2036 notices were mailed, has not appealed to the Board, and is not before the Board.
In view of and following the doctrine announced by the Board in a number of cases, we must hold that for the years 1920, 1921, and 1922 the Board is without jurisdiction to adjudicate the issues involved, and, therefore, as to those three years, the proceeding is dismissed for lack of jurisdiction. See . . . .
With reference to the year 1923, the situation is different. For that year the tax was assessed against the Van Cleave Trust, the *489 deficiency notice was mailed to that organization and it has appealed to the Board. The return for that year was made by the Van cleave Trust, as a trust. The Commissioner held that it was not a trust, but was an association, and taxable as a corporation, and based his determination of the deficiency on that holding. The petitioner contends that it was a trust, but says that, in the event it be held that in its organization and operation it*2037 fell short of qualifying as a trust under the late decisions of the Board, as well as of the courts, yet it did meet the test required by the Commissioner during the year in question, and that, therefore, section 704 of the Revenue Act of 1928 applies and must govern the decision. That section prescribes:
SEC. 704. TAXABILITY OF TRUSTS AS CORPORATIONS - RETROACTIVE.
(a) If a taxpayer filed a return as a trust for any taxable year prior to the taxable year 1925 such taxpayer shall be taxable as a trust for such year and not as a corporation, if such taxpayer was considered to be taxable as a trust and not as a corporation * * * under any ruling of the Commissioner or any duly authorized officer of the Bureau of Internal Revenue applicable to any of such years, and interpretative of any provision of the revenue Act of 1918, 1921, or 1924, which had not been reversed or revoked prior to the time the return was made, or under any such ruling made after the return was filed which had not been reversed or revoked prior to the time of the termination of the taxpayer's existence.
The issue in this case is the same as that raised and decided in *2038 , and . In the Landreth case, the Board reviewed the material facts and examined in meticulous detail the regulations, and the rulings of the Commissioner and other duly authorized officers of the Bureau of Internal Revenue which had not been reversed or revoked prior to the time the return was made or prior to the time of the termination of the taxpayer's existence. We found such rulings to be those included in the Cumulative Bulletins issued from time to time on the authority of the Bureau of Internal Revenue, and, from the consideration of them in connection with the facts before us in that case, we arrived at the conclusion that:
Beginning in the year 1919 and up to and including the period July-December, 1922, the Bureau of Internal Revenue was consistently ruling that irrespective of whether the taxpayer was engaged in business under corporate forms, it was taxable as a trust where the shareholders could not control the actions of the trustees; * * *.
and that being the case, we found for the petitioner.
*2039 Our decision in , followed that in , but inasmuch as our pronouncement went only so far as the period ended with December, 1922, and, further, there being involved in the instant case the tax return for 1923, filed, as stipulated for the purposes of this proceeding only, on or before March 15, 1924, therefore we have examined Cumulative Bulletins succeeding *490 the year 1922 and have found no ruling, and none has been cited, reversing or revoking earlier rulings on this point, but rather, those so found have reiterated or been confirmatory of them. Therefore, we extend our pronouncement in the Landreth case, as set forth above, to include the period to July 1, 1924, and we find for the petitioner on this point and hold that for the year 1923 it was entitled to be taxed as a trust.
Reviewed by the Board.
Judgment of no deficiency for the year 1923 will be entered for the petitioner.