1937 BTA LEXIS 783">*783 1. A written authorization to sign the Commissioner's name to consents enlarging the period for tax assessment fixed by statute was given by a Commissioner to an employee of the Bureau of Internal Revenue who continued for a substantial period during the term of the Commissioner's successor in office to act under it. Such authorization, held, adopted by the successor Commissioner.
2. A consent to the extension of the period for assessment of tax, signed by the taxpayer and the Commissioner, through his duly authorized agent, before expiration of the period fixed by statute, held, effective although a letter of notification was not signed by an officer of the Bureau or mailed to the taxpayer until after the statutory period had expired.
3. A consent to an extension of the period of assessment of a tax described as "due under the return", held, applicable to any tax due on items of income erroneously omitted from the return.
36 B.T.A. 1">*1 The Commissioner determined a deficiency of1937 BTA LEXIS 783">*784 $13,495.62 in petitioner's income tax for 1931, by adjustments and additions to income which are uncontested or settled by stipulation. Petitioner contends that assessment and collection of the deficiency are barred by the statute of limitations, alleging that a consent to an extension of the assessment period, on which the Commissioner relies, is invalid because not executed before the period had expired.
FINDINGS OF FACT.
Petitioner, a resident of New York, New York, filed his income tax return for 1931 on June 15, 1932, showing a loss of $4,547.70. Under 36 B.T.A. 1">*2 date of June 12, 1934, he signed in triplicate a "Consent Fixing Period of Limitation upon Assessment of Income and Profits Tax", which provided:
That the amount of any income, excess-profits, or war-profits taxes due under any return (or returns) made by or on behalf of the above-named taxpayer for the taxable year Year 1931 under existing acts, or under prior revenue acts, may be assessed at any time on or before June 30, 1935, except that, if a notice of a deficiency in tax is sent to said taxpayer by registered mail on or before said date, then the time for making any assessment as aforesaid shall be extended1937 BTA LEXIS 783">*785 beyond the said date by the number of days during which the Commissioner is prohibited from making an assessment and for sixty days thereafter.
This was received by the Bureau of Internal Revenue, special adjustment section, on June 13, 1934, and on June 14 James W. Carter, chief of the section, signed the name of Guy T. Helvering, Commissioner of Internal Revenue, thereto, adding his own initials and the date. Helvering never saw the consent, but Carter acted under a written authorization received five or six years ago to sign the Commissioner's name to such consents. After he signed the original and the duplicate, but not the triplicate, the original passed from his outgoing basket successively to his secretary, to the special adjustment section's file, and thence to the central file for waivers, which is located in the records division. It is stamped as received by the latter on June 20, 1934.
Under date of June 19, 1934, a letter, signed "Chas. T. Russell, Deputy Commissioner", was addressed to petitioner, acknowledging the latter's letter of June 13, transmitting the signed forms, and advising him "* * * that the consent signed by you has been accepted by the Commissioner. 1937 BTA LEXIS 783">*786 "
In Bureau practice it is customary for such a letter, accompanied by the triplicate of the consent, to be reviewed by four persons, who indicate their approval of it by writing their initials and the date on the Bureau's copy. The copy of the letter in question bears the initials of Arnold Rowland, auditor of the special adjustment section, dated 6/15/34; of M. H. Deneen, special auditor, dated 6/15/34; of C. C. Dannaker, assistant chief of section, dated 6/15/34; and of J. W. Carter, chief of the special adjustment section and superior of the other three, dated 6/16/34. After Carter had put his initials on the copy, he sent the original to Russell, whose approval and signature were in practice necessary before the letter could be mailed. The copy is stamped "Mailed Jun 19 1934."
Ordinarily, the triplicate of a consent, when executed, is sent to the taxpayer. The triplicate in this case was not sent to petitioner, but was kept in the Bureau files, unsevered from the duplicate. Attached to it was a copy of the letter of June 19, 1934, stamped "received" by the records division on June 20, 1934.
On June 12, 1935, the Commissioner mailed the notice of deficiency.
36 B.T.A. 1">*3 1937 BTA LEXIS 783">*787 OPINION.
STERNHAGEN: The petitioner contends that the determination of deficiency was made after the expiration of the statutory period, which he contends expired June 15, 1934, which was two years after the return was filed. (Revenue Act of 1928, sec. 275(a)). If correct, he escapes the deficiency (Revenue Act of 1928, sec. 601). The Commissioner answers with a waiver signed by the taxpayer on June 12, 1934, extending the period until June 30, 1935, within which extended period the deficiency notice was mailed. The petitioner replies that the waiver is ineffective to extend the period because it was not executed or agreed to by the Commissioner before the expiration of the limitation period. This is the narrow issue to be decided. There is no substantial dispute as to the facts but only as to their legal effect.
Revenue Act of 1928 contains the following provision:
SEC. 276. SAME - EXCEPTIONS.
* * *
(b) WAIVERS. - Where before the expiration of the time prescribed in section 275 for the assessment of the tax, both the Commissioner and the taxpayer have consented in writing to its assessment after such time, the tax may be assessed at any time prior to the expiration1937 BTA LEXIS 783">*788 of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
* * *
It is not disputed that the taxpayer consented before the expiration of the limitation period and it is clear that the waiver was signed by Carter before that time. The petitioner says, however, that Carter's signature of the Commissioner's name was not the required "consent in writing" of the Commissioner. He says Carter was not authorized to sign, and that, if authorized to sign, the signature is still not the whole act of consent; that, under the required or customary practice in the Bureau, there was no consent until the letter notifying him of acceptance was properly approved, which was not until after the period had expired.
The argument must be rejected. Carter was authorized. Although the written authorization under which he acted was given before Helvering became Commissioner in 1933, there is no reason why Helvering could not adopt it. There is nothing in the evidence to show that he repudiated it, but on the contrary there is enough to show that Carter had been acting under the authorization1937 BTA LEXIS 783">*789 for a year after Helvering became Commissioner.
Since we are dealing in attenuated technicalities, in which the petitioner seeks to identify the letter of notification with the consent, the answer is that there is nothing in this record to support the view that Carter's authority to consent was subject to any condition, 36 B.T.A. 1">*4 or more particularly to a condition precedent of someone else's approval of the notification. There is more reason to treat the initialing by Carter's subordinates as his own self-imposed condition subsequent than as Helvering's condition precedent. The consent was not dependent upon notice of acceptance under the 1928 Act any more than was the consent under the earlier acts. ; certiorari denied, .
We hold that before the expiration of the limitation period there was a consent in writing by both the taxpayer and the Commissioner to assessment before June 30, 1935.
The petitioner urges further that the consent is by its terms limited to taxes "due under" the return; that this is not broad enough to include all tax which the statute imposes, but only includes1937 BTA LEXIS 783">*790 such taxes as result from disallowance of deductions; that it excludes a deficiency resulting from adding to gross income an item discovered by the Commissioner to have been omitted from the return. 1 The waiver in evidence is not a specially drafted document for this taxpayer, but is on the blank form widely and ordinarily used, and must be construed as a general administrative form. It is fantastic to believe that the Government intended so to limit the consent or that the taxpayer so understood it when he executed it. But more than that, the language does not warrant such a construction. The tax "due under the return" does not mean the tax "shown on the return" or "resulting from the items shown on the return." It more reasonably means due under a correct return - due under the return contemplated by the statute. Here the Commissioner found that the taxpayer had omitted from his gross income a large amount said to have been derived from a partnership of which he was a member, and the petitioner now practically admits that there was such an omission. He now says that when he consented to extend the period of assessment he limited his consent to all but the most important item1937 BTA LEXIS 783">*791 of the deficiency. In this he should not succeed unless the language used permits no other construction. Since the language is not so clear, the petitioner's contention fails.
The deficiency which results from a proper recomputation on the merits is not barred by any statute of limitations.
Judgment will be entered under Rule 50.
Footnotes
1. See "Is Form 872 a Complete Waiver of the Limitation Period", by Emily Marx, The Tax Magazine, November 1936. ↩