The opinion of the court was delivered by: ROSLING
The plaintiff United States moves for summary judgment in its favor in an action brought against the defendant Samuel Malkin upon unpaid balances of tax assessments filed against him.
Defendant's opposing affidavit, contesting neither the assessments nor their presumptive prima facie value
in establishing the government's claim against him, proposes as an issue the defense of the statute of limitations. The Court finds, for the reasons noted in the following, that the statute has not run, and directs that the answer be stricken and judgment entered for the plaintiff as prayed for in the complaint.
The assessments upon which the government proceeds are of two kinds. The assessments in the first group were filed against defendant on four separate dates, to wit, February 28, 1955, June 8, 1955, August 31, 1955 and April 13, 1956. They are claimed by the I.R.S. to be for outstanding withholding tax liabilities of a partnership, Verlin and Sons, and to rest on defendant's status as a partner-member of Verlin. The second group comprises assessments filed against defendant as a responsible officer of a corporation, Arvee Stores, Inc., for withholding tax installments owing for various quarters, the earliest being the first quarter of 1953, and the most recent, the second quarter of 1955. All installments were, however, timely assessed against defendant on a single date, namely, January 15, 1957.
This action for the collection of the assessments was commenced on May 12, 1969, by the filing of the complaint on that day.
26 U.S.C. § 6502 (a) provides that following due assessment
"such tax may be collected * * * by a proceeding in court, * * * begun
(1) within 6 years after the assessment of the tax, or
(2) prior to the expiration of any period for collection agreed upon in writing by the Secretary or his delegate and the taxpayer before the expiration of such 6-year period * * *
The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon."
The basic six year period for the commencement of this action has, accordingly, long since expired even as to the liabilities most recently assessed (January 15, 1957). The moving affidavit, however, alleges, and defendant's opposing papers concede that there have been three extensions of time which tolled the six year statute. The extensions were executed by defendant in relation to offers in compromise of the tax liability proposed by him to the I.R.S. The stipulations of extension provided for "the suspension of the running of the statutory period of limitations on * * * collection for the period during which this offer is pending, on the period during which any installment remains unpaid, and for 1 year thereafter."
The effective periods of extension of the several stipulations were as follows:
Offer filed Offer Rejected or Statute
withdrawn suspended to
Period of extension
7/14/58 2/18/59 2/18/60 1 yr. 219 days
3/5/63 4/22/64 8/24/64
1 yr. 172 days
8/25/64 1/11/66 1/11/67 2 yrs. 139 days
Total period of suspension 5 yrs. 165 days
Statutory period for collection after assessment 6 yrs.
Total period for bringing suit after assessment 11 yrs 165 days
Inasmuch as the most recent date of assessment, as noted above, was January 15, 1957, the latest date for bringing timely suit on such installment would have been June 28, 1968. The commencement of action on May 12, 1969, as is here the situation, would be untimely, were we to consider only the allegations of the moving affidavit, inasmuch as no further suspension of the statute of limitations is claimed therein.
Paragraph VIII of the complaint, however, contains the following allegation:
"An involuntary petition in bankruptcy was filed against Samuel Malkin as a co-partner doing business with others in the Eastern District of New York on October 7, 1955. An order closing the estate was issued by the Referee in Bankruptcy on March 10, 1958. Pursuant to the provisions of Section 6503 (b) of the Internal Revenue Code of 1954 the period of limitations on collection of the above-described assessments was suspended while the defendant's property was within the custody of the ...