United States v. Continental Bank & Trust Co., 305 U.S. 398 (1939)

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United States v. Continental Bank & Trust Co.

No. 22

Argued December 5, 1938
Decided January 3, 1939
305 U.S. 398

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

1. Under the Revenue Act of 1926, suit upon a deficiency assessment must be begun within six years after the assessment. § 278(d). P. 403.

2. Under the Revenue Act of 1926, the time for bringing suit, in the absence of assessment, to enforce liability of a transferee of the taxpayer’s property is limited to six years, made up of five years after return, allowed for assessment against taxpayer, § 277(a), and one year thereafter for assessment against transferee. § 280(b)(1). Id.

3. A suit against transferees of a transferee of property of a delinquent taxpayer, which is otherwise barred, cannot be sustained as timely under §§ 280 and 278(d) of the Revenue Act of 1926, because brought within six years of the making of an assessment against the first transferee. P. 404.

4. In determining whether an assessment against a taxpayer’s transferee was in time under the Revenue Act of 1926, which allows six years after the taxpayer’s return, § 277(a), 280(d), but provides that the running of the limitation shall be suspended while the Commissioner is prohibited from making assessment and for 60 days thereafter, § 280(d), it is held that, the transferee having died while his petition for review was pending undecided before the Board of Tax Appeals, and no application for a substitution having been made, it was error to include in the period of suspension 23 months that elapsed between the death and the date of an attempted assessment, since the Commissioner was not precluded during those months, but could have obtained a dismissal of the Board’s proceeding within a reasonable time and made his assessment. P. 405.

94 F.2d 81 affirmed.

Certiorari, 304 U.S. 554, to review the affirmance of a decree dismissing the amended bill in a suit by the Government against beneficiaries and trustees under a will to impress a trust upon the assets of the estate, for the collection of an income and profits tax, to the extent of assets transferred to the testator by a corporation against which the tax was originally assessed.