Appeal from the United States Board of Tax Appeals.
Before MANTON, L. HAND, and AUGUSTUS N. HAND, Circuit Judge.
These appeals, taken by the taxpaper and Commissioner, will be considered in one opinion.
The taxpayer was a new corporation organized pursuant to an agreement of consolidation, under date of January 30, 1922, of the Oswego Falls Pulp & Paper Company, the Skaneateles Paper Company, and the Sealright Company, Inc., as filed in the office of the secretary of state of New York. The agreement provided for consolidation of the three corporations pursuant to section 7 of the Business Corporation Law (Consol. Laws, c. 4) of the state of New York. The assets of the three corporations were conveyed to the taxpayer, and it assumed the liabilities of each. The questions presented on the Commissioner's appeal are the nature and extent of the liability of the taxpayer in respect to income and profit taxes incurred by the taxpayer by reason of this consolidation. The first question is whether it is liable as a transferee of the assets of the Oswego Falls Pulp & Paper Company within the meaning of section 280 of the Revenue Act of 1926 (chapter 27, 44 Stat. 9, 61 [26 USCA § 1069 and note]). Second, whether the waivers signed by the taxpayer are effective to extend the statutory period for assessments against the taxpayer as a transferee of one of the consolidated corporations, namely, the Oswego Falls Pulp & Paper Company.
The taxpayer's appeal raises the question of whether the notice of liability as to docket No. 28,301 was competent to vest the board with jurisdiction of the appeal.
Income tax returns were filed by the Oswego Falls Pulp & Paper Company for the years 1917 to 1921, inclusive. Prior to November 19, 1925, income and profit tax waivers were executed in the name of the Oswego Falls Pulp & Paper Company extending the period within which taxes might be assessed on said returns. These waivers expired more than one year before the mailing of the notices of liability that are here involved. November 19, 1925, a waiver for the years 1917 to 1920, inclusive, was executed in the name of the Oswego Falls Pulps & Paper Company by its president and it bore the corporate seal of that company. On the same day, a waiver was filed bearing the seal of the taxpayer as follows:
"In pursuance of the provisions of existing Internal Revenue Laws, Oswego Falls Pulp and Paper Company (parent), a taxpayer of Fulton, New York, and the Commissioner of Internal Revenue, hereby waive the time prescribed by law for making any assessment of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of said taxpayer for the four years 1917, 1918, 1919, and 1920 under existing revenue acts, or under prior revenue acts. (See another waiver of same date for years 1906 to 1916 incl.)
"This waiver of the time for making any assessment as aforesaid shall remain in effect until December 31, 1926, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days, or (2) if an appeal is filed with the said Board then said date shall be extended by the number of days between the date of mailing of said notice of deficiency and the date of final decision by said Board. "Oswego Falls Pulp & Paper Company,
"By its sole beneficiary and successor through consolidation to wit:
"Oswego Falls Corporation, Taxpayer.
"[Signed] By H. L. Paddock, President.
"[Signed] D. H. Blair, ...