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U.S. Supreme Court

Burnet v. Chicago Ry. Equipment Co., 282 U.S. 295 (1931)

Burnet v. Chicago Railway Equipment Company

No. 231

Argued December 3, 1930

Decided January 5, 1931

282 U.S. 295


1. The power of the Commissioner of Internal Revenue, under § 278(c) of the Revenue At of 1924, to sign with the taxpayer a waiver to extend the time for assessment of income and profits taxes under the Act of 1918, could be exercised after his determination of deficiency had been appealed to and was pending before the Board of Tax Appeals. P. 282 U. S. 298.

2. The Commissioner, when contemplating the making of a jeopardy assessment which the taxpayer desired to avoid, was authorized, under his general administrative powers, to accept instead the waiver, as a substitute means of insuring ultimate collection. P. 282 U. S. 298.

3. The power of the Commissioner to sign a waiver under § 278(c) of the 1924 Act existed after the expiration of the five-year limitation on assessment. § 277(a). So held where that period expired after the date of the Act, and without deciding whether § 278(e) qualifies § 278(c) as to waivers on assessments barred before that date. P. 282 U. S. 298.

4. Section 281(e) of the 1924 Act, which extended the time for making claims for refund where a waiver of assessment had been filed prior to certain specified dates, was merely to extend the time for filing claims for refund in particular cases of taxes. There is no necessary relation between it and § 278(c). P. 282 U. S. 300.

5. A taxpayer who has signed a waiver and has had the validity of the alleged deficiency determined in the courts, on appeal from the Board of Tax Appeals, has no good ground for complaint that he cannot thereafter raise the same question on a claim for refund. P. 282 U. S. 301.

6. A waiver, signed while appeal from a deficiency determination, duly noticed, was pending before the Board of Tax Appeals, provided that the time for making assessment should continue until a date specified and should then expire,

"except that, if a

Page 282 U. S. 296

notice of deficiency in tax is sent to said taxpayer and 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 and the date of final decision by said Board."

Held that the quoted provision applied to the existing notice and appeal, the object of the waiver having been to have the pending case determined without exacting payment, or a bond, from the taxpayer meanwhile. P. 282 U. S. 302.

7. A waiver extending time for a deficiency assessment, made when assessment was already barred, cannot be held void for duress because procured by a threat of the Commissioner to make a jeopardy assessment and enforce collection where, in the absence of a determination that the bar had attached, it was the Commissioner's duty to proceed to insure the assessment and collection. P. 282 U. S. 303.

39 F.2d 378 reversed.

Certiorari, post, p. 821, to review a judgment of the circuit court of appeals reversing the Board of Tax Appeals in proceedings for the assessment of an income and excess profits tax. See also 4 B.T.A. 452; 20 F.2d 10; 14 B.T.A. 471.


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