*3152 1. STATUTE OF LIMITATIONS. - Petitioner's taxable year in question was the fiscal year ending November 30, 1919. A waiver was executed by the petitioner "for the year 1919." Held, that such waiver was sufficient to waive the statute of limitations.
2. INVESTED CAPITAL. - The invested capital for the fiscal year ending November 30, 1919, should be properly adjusted on account of the prior-year tax liability in accordance with the stipulation of the parties.
*883 In this proceeding the petitioner seeks a redetermination of its income and profits-tax liability for the fiscal year ended November 30, 1919, for which the respondent, as set forth in his deficiency letter dated January 11, 1926, determined a deficiency of $38,521.66.
The petition alleges that the respondent erred (1) in failing to allow as part of invested capital an amount in excess of $400,000, representing expenditures for capital assets incurred and made prior to the taxable year; (2) in reducing invested capital by an amount of taxes for the prior*3153 year which amount has, since the mailing of the deficiency letter, been reduced by the respondent, and (3) in issuing a deficiency letter after the running of the statute of limitations. The first issue was abandoned at the hearing and with respect to the second issue, the parties have stipulated to make the proper adjustment for prior year taxes in the final determination under Rule 50.
FINDINGS OF FACT.
The petitioner was incorporated under the laws of the State of Maine in 1864, and has its principal office at Bath, Me.
On February 16, 1920, it filed on Form 1120-A, its "corporation Income and Profits Tax Return for Fiscal Period begun December 1, *884 1918 and ended November 30, 1919." On December 16, 1924, it executed the following income and profits-tax waiver:
In pursuance of the provisions of existing Internal Revenue Laws, Worumbo Manufacturing Company, a taxpayer, of 53 Front St., Bath, Maine, 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*3154 taxpayer for the year 1919, 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 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 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.
WORUMBO MANUFACTURING COMPANY
Taxpayer.
By (Signed) OLIVER MOSES, Treas.
(Signed) D. H. BLAIR, Commissioner.
The deficiency letter was mailed to the petitioner on January 11, 1926.
OPINION.
GREEN: The petitioner contends that the waiver set out in the findings of fact is not an effective waiver for the reason that it is "for the year 1919" and not for the fiscal year ended November 30, 1919. We fail to see any merit in this contention. The term "taxable*3155 year" is defined in all of the Revenue Acts beginning with the Revenue Act of 1918 as meaning "the calendar year, or the fiscal year ending during such calendar year." The term "year 1919" as used by the parties to the waiver could have referred to no other year than the taxable year 1919 which in this case was the fiscal year ended November 30, 1919. In our opinion the waiver was valid and since it had not expired at the time the deficiency letter was mailed the proposed deficiency is not barred by the statute of limitations. See section 277(b) of the Revenue Act of 1924.
The invested capital for the fiscal year ended November 30, 1919, should be adjusted by the correct amount of Federal income and profits taxes prorated for the prior year in accordance with the stipulation of the parties.
Judgment will be entered under Rule 50.