-34-
premium on evasion, since a taxpayer would have nothing
to lose by not filing a return as required by statute.
[Id. at 703-704.]
F. Ardbern/Blenheim
One year later, the Board decided Ardbern Co. v.
Commissioner, 41 B.T.A. 910 (1940), and Blenheim Co. v.
Commissioner, 42 B.T.A. 1248 (1940). In Ardbern, the taxpayer
was a foreign corporation that attempted to file Federal income
tax returns for 1929 through 1932 in June 1937. The taxpayer
tendered those returns to the Commissioner’s revenue agent, but
the agent refused to accept them believing that the returns had
to be filed with the Collector of Internal Revenue at Baltimore,
Maryland. The agent did not inform the taxpayer how to file
those returns properly. On July 3, 1937, the Commissioner issued
a notice of deficiency to the taxpayer for the years in question
and, 6 days later, prepared substitute returns for the taxpayer.
On September 29, 1937, the taxpayer petitioned the Board with
respect to the matter, and the Commissioner answered that
petition on December 7, 1937. On October 28, 1938, the taxpayer
filed its 1929 through 1932 Federal income tax returns with the
Collector of Internal Revenue at Baltimore, Maryland, claiming
deductions and reporting no tax due.
The Board applied Taylor Sec., Inc. v. Commissioner, supra,
and sustained the Commissioner’s disallowance of deductions. The
Board stated:
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