1) In 1965, petitioners Gibbs filed a case challenging a deficiency income tax assessment issued by the Commissioner of Internal Revenue in 1956.
2) The petitioners argued they had not received notice of the denial of their claim for refund of the assessment. However, the court found their attorney had received notice on behalf of the petitioners in 1956.
3) The court upheld the tax court's finding that the petitioners' actions contesting the assessment and claiming a tax credit were barred by the statute of limitations.
1) In 1965, petitioners Gibbs filed a case challenging a deficiency income tax assessment issued by the Commissioner of Internal Revenue in 1956.
2) The petitioners argued they had not received notice of the denial of their claim for refund of the assessment. However, the court found their attorney had received notice on behalf of the petitioners in 1956.
3) The court upheld the tax court's finding that the petitioners' actions contesting the assessment and claiming a tax credit were barred by the statute of limitations.
1) In 1965, petitioners Gibbs filed a case challenging a deficiency income tax assessment issued by the Commissioner of Internal Revenue in 1956.
2) The petitioners argued they had not received notice of the denial of their claim for refund of the assessment. However, the court found their attorney had received notice on behalf of the petitioners in 1956.
3) The court upheld the tax court's finding that the petitioners' actions contesting the assessment and claiming a tax credit were barred by the statute of limitations.
1965) FACTS: On February 6, 1965, the respondent Commissioner of Internal Revenue issued against the petitioners Deficiency Income Tax Assessment with the demand it should be paid on or before March 15, 1956. On March 14, 1956, Allison J. Gibbs, signing as attorney-in-fact for Finley J. Gibbs, his brother, questioned the disallowance of the items which gave rise to the deficiency assessment and requested for a correction of it. It was denied. Allison Gibbs sent to the Commissioner her check, representing their payment with the demand for its refund. The demand for refund was denied by the CIR. Allison Gibbs sent another letter to the Commissioner stating that its deficiency assessment was illegal, and the CIRs letter was not a ruling on her client's claim for refund and her assertion for certain claims for tax credits arising allegedly from some previous overpayment made by the petitioner to the respondent Commissioner. There was no reply. Petitioners filed with the CTA a "Petition for Review and Refund of Income Tax with Motion for Suspension of Collection of Additional Taxes." The CTA sustained the objection to its jurisdiction and upheld the respondent Commissioner's claim that the two causes of action asserted by the petitioner were barred by prescription. ISSUE: Whether or not the petitioners action is barred by prescription. HELD: Yes. Anent the insistence of the petitioners that they never received a copy of the letter of October 26, 1956 denying their claim for refund, suffice it to say that while they themselves personally might not have received a copy of it, Allison J. Gibbs, as their attorney-in-fact and actually as their counsel, received a copy of the same. Based on the evidence, there is a lawyer-client-relationship of the petitioners herein and Allison Gibbs. Besides, Allison Gibbs claimed he would collect, if his demand for refund for the petitioners were not effected by the respondent Commissioner, "attorney's fees of 25% of the amount involved."
There can be no question, therefore, that the receipt of the
October 26, 1956 letter-decision of the Commissioner by Allison Gibbs was receipt of the same by the petitioners, the former being then the latter's legal counsel. In the premises, the respondent court cannot be considered to have erred, therefore, in computing the 30-day prescriptive period in question from the date the said letter was received by Allison J. Gibbs. On the other issue, petitioners maintain that the respondent court erred in ruling that their claim for tax credit had already expired since it pertained to tax payments made in 1951 and the protest and claim for demand therefor was made only in 1958. It is bereft of merit. A taxpayer claiming for refund must comply with the requirement of both sections, that is, he must file a claim for refund with the Collector of Internal Revenue within 2 years from the date of his payment of the tax, as required by Section 306 of the National Internal Revenue Code.
Taxes for Small Businesses 2023: Beginners Guide to Understanding LLC, Sole Proprietorship and Startup Taxes. Cutting Edge Strategies Explained to Reduce Taxes for Business, Investing, & More.
Taxes for Small Businesses 2023: Beginners Guide to Understanding LLC, Sole Proprietorship and Startup Taxes. Cutting Edge Strategies Explained to Lower Your Taxes Legally for Business, Investing
Invested: How I Learned to Master My Mind, My Fears, and My Money to Achieve Financial Freedom and Live a More Authentic Life (with a Little Help from Warren Buffett, Charlie Munger, and My Dad)
Owner Operator Trucking Business Startup: How to Start Your Own Commercial Freight Carrier Trucking Business With Little Money. Bonus: Licenses and Permits Checklist
Tax Accounting: A Guide for Small Business Owners Wanting to Understand Tax Deductions, and Taxes Related to Payroll, LLCs, Self-Employment, S Corps, and C Corporations
How To Get IRS Tax Relief: The Complete Tax Resolution Guide for IRS: Back Tax Problems & Settlements, Offer in Compromise, Payment Plans, Federal Tax Liens & Levies, Penalty Abatement, and Much More
LLC Startup 2023: How to Create Financial Freedom Through Launching a Successful Small Business. From Creating a Business Plan for the Limited Liability Company to Turning the Vision into a Reality.