EXCEPTION No. II EXCEPTION No. III CONCLUSION The taxpayer requests an oral hearing before the Commissioner or whatever body he designates to represent him, and reserves the right to submit additional evidence and a supplementary brief. sworn according to law, on his oath says that he is the.... (Title of officer) of full age, being duly ..of the above-named company, that the facts set forth in the foregoing protest to the Commissioner of Internal Revenue are true to the best of deponent's knowledge and belief. Subscribed and sworn to before me this.........day of..........192.. Notary Public (Name of officer) Due dates of returns for 1917 and subsequent years. 82 65 67 68 68 68 Interest on jeopardy assessments. 90 Method of calculating interest. 90 69 70 70 No interest on judgments where suits are instituted without assessment.. Interest charge for delinquency. 91 92 Statutory period suspended-when?. Four-year period for taxes imposed by 1921 Five-year period for taxes imposed by 1909, 1913, 1916, 1917 and 1918 laws.. Limit upon assessment of ad valorem penalties.. Change in statutory limit does not violate vested right. When limitation periods begin to run.. Limitation period not extended by dissolution of corporation.. Statutory period for assessments in case of transferred assets.. Four-year period for taxes imposed by 1926 Limit of one year for certain estates.. After the Treasury or the Tax Board or the Appellate Courts, in case of review, has made a final determination of a deficiency, the same must be assessed and collected. This chapter deals with the method of assessment and the statutory time within which it must be made. Interest on deficiencies is also discussed. Method of Assessment Assessments are made as a general rule after a taxpayer has been accorded the hearings described in Chapter 4, and has been notified of the deficiency by a sixty-day letter, giving him an opportunity to take an appeal to the Board of Tax Appeals. REGULATION. If the Commissioner determines that there is a deficiency in respect of the income tax imposed by Title II of the Revenue Act of 1926 (see sections 271 and 273 and articles 1211 and 1231 and with respect to assessments under prior Acts, see section 283), the Commissioner is authorized to notify the taxpayer of the deficiency by registered mail. Within 60 days after such notice is mailed, a petition may be filed with the Board of Tax Appeals for a redetermination of the deficiency. In determining such 60-day period, Sunday is not to be counted as the sixtieth day. Except as stated in paragraphs (1), (2), (3), (4), and (5) below, no assessment of a deficiency in respect of a tax imposed by Title II shall be made until such notice has been mailed to the taxpayer, nor until the expiration of such 60-day period, nor, if a petition has been filed with the Board, until the decision of the Board has become final. As to the date on which a decision of the Board becomes final, see section 1005. (Art. 1232.) When assessment may be made without 60-day notice. REGULATION. (1) If a taxpayer is notified of an additional amount of tax due on account of a mathematical error appearing upon the face of the return, such notice is not to be considered as a notice of a de-. ficiency, and the taxpayer has no right to file a petition with the Board upon the basis of such notice, nor is the assessment of such additional tax prohibited by the provisions of section 274 (a). (2) If the Commissioner believes that the assessment or collection of a deficiency will be jeopardized by delay, such deficiency shall be assessed immediately, as provided in section 279. (See article 1281.) (3) Upon the adjudication of bankruptcy of any taxpayer in any bankruptcy proceeding or the appointment of a receiver for any taxpayer in any receivership. proceeding before any court of the United States or of any State or Territory or of the District of Columbia, any deficiency determined by the Commissioner in respect of the tax shall be assessed immediately, irrespective of the provisions of section 274 (a), if such deficiency has not been assessed in accordance with law prior to the adjudication of bankruptcy or the appointment of a receiver. (Art. 1232.) The foregoing exceptions are specifically covered by sections 274, 279 and 282 of the law. Assessments against bankrupt estates and receiverships are discussed in Chapter 4. Jeopardy assessments are considered below. Jeopardy assessments. LAW. Section 279. (a) If the Commissioner believes that the assessment or collection of a deficiency will be jeopardized by delay, he shall immediately assess such deficiency (together with all interest, additional amounts, or additions to the tax provided for by law) and notice and demand shall be made by the collector for the payment thereof. (b) If the jeopardy assessment is made before any notice in respect of the tax to which the jeopardy assessment relates has been mailed under subdivision (a) of section 274, then the Commissioner shall mail a notice under such subdivision within 60 days after the making of the assessment. (c) The jeopardy assessment may be made in respect of a deficiency greater or less than that notice of which has been mailed to the taxpayer, despite the provisions of subdivision (f) of section 274 and whether or not the taxpayer has theretofore filed a petition with the Board of Tax Appeals. The Commissioner shall notify the Board of the amount of such assessment, if the petition is filed with the Board before the making of the assessment or is subsequently filed, and the Board shall have jurisdiction to redetermine the entire amount of the deficiency and of all amounts assessed at the same time in connection therewith. (d) If the jeopardy assessment is made after the decision of the Board is rendered such assessment may be made only in respect of the deficiency determined by the Board in its decision. (e) A jeopardy assessment may not be made after the decision of the Board has become final or after the taxpayer has filed a petition for review of the decision of the Board. . . . . (k) No claim in abatement shall be filed in respect of any assessment made after the enactment of this Act in respect of any income war-profits, or excess-profits tax. RULING. The probable run of the statute of limitations against the Government as a result of which it would be precluded from bringing suit or proceedings against the taxpayer constitutes jeopardy within the meaning of section 250 (d) of the Revenue Act of 1921 and under such circumstances the Commissioner may assess the tax without giving the notice or awaiting the conclusions of the hearing provided for in said section. (C. B. I-1, 305; I. T. 1333.) There is some question about the foregoing ruling being correct and the courts will no doubt have an opportunity to pass on this question. What did Congress intend? Does the setting of the sun on a particular day constitute jeopardy? Congress no doubt had in mind bankruptcy,1 or the early probability thereof, concealment of assets to evade taxes, departure of taxpayer and the like. The word "jeopardized" should be defined so as to exclude the mere running of the statute of limitations. It should be made impossible for the government to make an arbitrary assessment merely because the end of the statutory period for assessment is approaching. The limitation on assessments had a definite purpose. It gave taxpayers the right to expect that their taxes would be finally deter 1 Section 282 of the 1926 law specifically provides for assessments in case of bankruptcy. See Chapter 4. mined within the stated period. By making so-called "jeopardy" assessments, the Commissioner destroys rights of taxpayers, merely to protect the Treasury from its own negligence. Assessment should only be made after notice and the opportunity for appeal has been had by the taxpayer, unless, of course, there has been fraud. Generally speaking, jeopardy assessments are made where the statutory period is about to expire. Where a particular case indicates that the tax is in jeopardy for any other reason, a jeopardy assessment would, of course, be made. A jeopardy assessment may be made before an appeal is filed with, or while it is pending before, the Board. Such an assessment can not be made if the Board denies the Commissioner's deficiency. The Commissioner in such a case must appeal to the courts. Under the Revenue Act of 1926, an assessment made after the taxpayer has been adjudicated a bankrupt is not a jeopardy assessSuch assessments are governed by section 282 (a). When a jeopardy assessment is made, the collection thereof may be stayed by the filing of a bond with the collector. (See page 98.) Assessment after appeal is heard by Board.— REGULATION. (4) (a) If, after the enactment of the Revenue Act of 1926, the Board renders a decision and determines that there is a deficiency, and, if the taxpayer has the right to file a petition for review of the decision by a circuit court of appeals (or the Court of Appeals of the District of Columbia) and files such petition, the filing of the petition will not operate as a stay of the assessment of any portion of the deficiency determined by the Board unless he has filed a bond with the Board as provided in section 1001 (c). If in such a case the necessary bond has not been filed by the taxpayer, the amount determined by the Board as the deficiency will be assessed immediately after the filing of such petition. (b) If the Commissioner files a petition for review and (1) if the taxpayer has not filed a petition for review within six months after the decision of the Board is rendered, or (2) if such petition has been filed by the taxpayer, but the necessary bond referred to in section 1001 (c) has not been filed with the Board, the amount determined by the Board as the deficiency will be assessed, in the case of (1), immediately after the expiration of the six-months' period, and in the case of (2), immediately after the filing of the petition for review by the taxpayer. (5) The taxpayer may at any time by a signed notice in writing filed with the Commissioner waive the restrictions on the assessment of the whole or any part of the deficiency. The notice must in all cases be filed with the Commissioner. The filing of such notice with the Board does not constitute filing with the Commissioner within the meaning of the statute. After such waiver has been acted upon by |