The opinion of the court was delivered by: BYERS
This is an action at common law to recover a deficiency of income taxes said to have been payable by Richard F. Fischer, deceased, for the years 1920 and 1921. The decedent died in June of 1922, and the defendant above named was appointed administrator c.t.a. by the surrogate of Nassau county on September 20, 1922.
On March 22, 1934, a summons in this action was served upon the defendant, upon which there was indorsed a brief statement that the action is to recover $5,467.74 income taxes duly assessed by the Commissioner of Internal Revenue, and certified to the collector for the First District, against the decedent and payable by the defendant under section 3467, Rev.St. (31 U.S.C.A. § 192). There was a notice that, upon default, judgment would be taken for the said sum with interest and costs.
It appears from the files that this summons was issued on March 5, 1934, by the clerk of this court, and dated on that day.
There are two motions before the court:
One by the plaintiff for an order amending the summons and notice of appearance by changing the name "Dieterich D. Fischer" to "Dieterich P. Fischer," and permitting the plaintiff to serve and file its complaint, and for such other relief etc. That motion is opposed.
The defendant makes a cross-motion for an order dismissing the action because of the failure and default of the plaintiff to serve a copy of the complaint pursuant to the written demand therefor, and for the unreasonable neglect of the plaintiff to proceed in the action, and for want of prosecution, both pursuant to sections 181 and 257 of the Civil Practice Act of New York, and rule 28 of the General Rules of this court, and for such other, etc., relief.That cross-motion is opposed.
The facts as gleaned from the motion papers, stated chronologically, are as follows:
The decedent filed his individual income tax return for the year 1920, and disclosed a tax liability of $6,784.32, of which all but $1,985.19 was paid. As stated, he died in June of 1922.
October 10, 1925, the defendant, as administrator, filed a claim for abatement of the said balance unpaid, which resulted in a reaudit of the tax liabilities of the decedent for the years 1920 and 1921, which was said to disclose deficiencies for those years in the sums of $2,484.23 and $998.32, respectively, or a total of $3,482.55.
April 30, 1926, the defendant was notified that the claim for abatement was rejected, and that on March 12 and 15, 1926, assessments against the estate in the last-mentioned sums had been made.
On November 24, 1925, the defendant had executed a waiver of the statute of limitations for the years 1920 and 1921, extending the time of assessment to December 31, 1926, which means that the last-mentioned assessments were timely.
As of March 28, 1926, demand was made upon the defendant for the amounts of said deficiency assessments, which was not complied with.
March 12 and 15, 1932, were the last respective dates for the commencement of actions to collect these sums.
About two months prior to the last-named dates, or on January 16, 1932, the defendant submitted an offer in compromise in the sum of $500 in settlement of the said additional assessments, which contained the following waiver of limitation: "The taxpayer hereby expressly waives * * * 2. the benefit of any Statute of Limitations affecting the collection of the liability sought to be compromised, and in the event of the rejection of the offer, expressly consents to the extension of any Statute of Limitations affecting the collection of the liability sought to be compromised by the period of time (not to exceed two years) elapsed between the date of the filing of this offer and the date on which the final action thereon is taken."
The effect of this waiver was to interpose a suspension of the statute which on January 16, 1932, would have become operative after the lapse of 56 and 59 days, respectively, and those periods were available to the government after action had been taken upon the ...