The opinion of the court was delivered by: COSTANTINO
COSTANTINO, District Judge.
This is an action for a refund of income taxes brought by plaintiffs Ned and Frances Miller. An audit of the Millers' joint 1957 Income Tax Return in 1966 resulted in a determination of a deficiency of $37,923.75. An assessment was made and the amount was paid in full by the Millers. On May 13, 1966 the Millers filed a claim for a refund. The case was tried to the court on April 5, 1973, decision being reserved and leave given to counsel to submit post trial briefs.
At issue are two questions. First, has the statute of limitations run on the claim for a refund, and second, if it has not, was the transaction involved here a loan from a corporation controlled by Mr. Miller as plaintiff contends, or was it a taxable dividend as the Internal Revenue Service believes. A finding of fact on the second question is unnecessary as the court finds that plaintiffs are barred by the statute of limitations from bringing this action. The court finds the following facts and conclusions of law dispositive of this case.
Whether the Millers ever filed a "Form 2297" Waiver of Statutory Notification of Claim Disallowance, is the threshold question. The form itself cannot be found. The claim for refund was made on May 13, 1966 and on November 8, 1966 a letter written by Mr. Irving Frederick, attorney for the Millers in this suit, was received by Mr. William Krebs, Revenue Agent for the Internal Revenue Service, which said:
In re: Ned and Frances Miller
Claim for Refund -- Year 1957
Gentlemen: Enclosed herein please find Form 2297, waiver of statutory notification of claim disallowance, executed by the above named clients.
Mr. Frederick testified at the trial that he "must have" sent the waiver but that it could have been for other 1957 claims by the Millers. He suggested that Mr. Krebs may have been trying to "get something else out of the way." While it is true that Mr. Miller had two other potential claims for 1957, it appears from the record that they were never filed and therefore waivers would have been unnecessary.
In addition, there are two notations in Mr. Krebs' files on this case which bear on the question of the waiver's existence. On the "Examining Officer's Activity Record" next to "11/8" it says, "2297 Received." On the "Transmittal Letter" dated "11/23/66" the following appears: "Taxpayer has signed and submitted Form 2297 waiving statutory notice of claim disallowance."
On December 14, 1966 the Millers' claim was rejected and a "30-day letter" was sent to the Millers. On January 9, 1967 they filed a protest with the Appellate Division of the Internal Revenue Service and the disallowance of the claim was sustained. On May 20, 1968 a "statutory notification ...