Swallows Holding, Ltd. - Page 79

                                        -35-                                          
                    Petitioner did not, by the lodgment of returns                    
               with * * * [the revenue agent], discharge the duty                     
               which the statute laid upon it.  Also, the action of                   
               petitioner in filing returns with the collector at                     
               Baltimore on October 28, 1938, was ineffective to bring                
               it within the limitations of the statute so as to                      
               entitle it to the benefit of deductions.  These returns                
               were filed (a) after respondent had determined the                     
               deficiencies and prepared returns for petitioner under                 
               section 3176 of the Revised Statutes, as amended, and                  
               (b) after the petition and answer had been filed and                   
               the case was at issue before the Board, and only                       
               approximately two and one-half months prior to the                     
               hearing.  Returns filed under such circumstances do not                
               meet the requirements of section 233.  Taylor                          
               Securities, Inc., 40 B.T.A. 696.  On the point under                   
               discussion, the facts of the instant proceeding are not                
               distinguishable in any material respect from those of                  
               the Taylor case.  On authority of that decision and for                
               the reasons therein stated, which need not be repeated                 
               here, respondent’s action in computing the present                     
               deficiencies without the allowance of deductions is                    
               approved.  [Ardbern Co. v. Commissioner, 41 B.T.A at                   
               919-920.]                                                              
               Upon appeal, the Court of Appeals for the Fourth Circuit               
          modified and remanded the Board’s decision on the authority of              
          Anglo-Am. Direct Tea Trading Co. v. Commissioner, 38 B.T.A. 711             
          (1938).  The court stated:                                                  
               fair dealing between the Government and a taxpayer                     
               would require the agent to whom the returns were                       
               improperly tendered for filing to advise the taxpayer                  
               as to the official and place where the returns should                  
               be filed.  Here the agent Muller rejected the returns                  
               on the sole ground that they were improperly executed                  
               and did not notify the taxpayer that the returns could                 
               in no event be filed with him.  Soon after the refusal                 
               to accept the returns the deficiency was determined                    
               against the taxpayer.                                                  
                    It is conceded that, if the return which taxpayer                 
               attempted to file before Muller in June 1937 had been                  
               properly filed before the Collector at Baltimore,                      
               taxpayer would have been entitled to the deductions                    





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