Memorandum for the United States in Opposition — Shahadi v. United States

Iu the Supreme Court of the Hnited States

OcToBER TERM, 1964

No. 989

ALBERT N, SHAHADI, PETITIONER

Vv.

UNITED States OF AMESICA

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

MEMORANDUM FOR THE UNITED STATES IN OPPOSITION

Section 277 of the Internal Revenue Code of 1939,

providing for the suspension of the running of the

statute of limitations in certain circumstances, reads

as follows:

The running of the statute of limitations pro-

vided in section 275 and 276 on the making of

assessments and the beginning of distraint or a

proceeding in court for collection, in respect of

any deficiency, shall (after the mailing of a

notice under section 272(a)) be suspended for

the period during which the Commissioner is

prohibited from making the assessment or be-

ginning distraint or a proceeding in court (and

tn any event, tf a proceeding in respect of the

deficiency 1s placed on the docket of the Board

(1)

TTC $25—65

2

[Tax Court], until the decision of the Tax Court

becomes final), and for sixty _ thereafter.

[Emphasis added. ]

Petitioner argues (Pet. 11-14), that these provisions

do not apply where there has been a jeopardy assess-

ment under Section 273 of the Code. Specifically,

petitioner argues that the running of the statute is not

suspended after a jeopardy assessment has been made

even though “a proceeding in respect of the deficiency

is placed on the docket of the Board [Tax Court],’’

as it was in this case. Petitioner’s argument is in-

consistent with the unqualified language of the paren-

thetical phrase of Section 277 and with the legisla-

tive history supporting the addition of this phrase

to the statute, which states that:

It is specifically provided in section 277 that the

limitation period shall be suspended, if any pro-

ceeding ts placed.on the docket of the Board,

until the decision of the Board in respect

thereof becomes final and for 60 days there-

afte». [Emphasis added.] *

In accordance with the unqualified language, the

decided cases have uniformly construed Section 277,

as the court of appeals here held, ‘‘in the broadest

fashion,’’ as suspending the running of the statute of

limitations “when matters are being litigated in the

Tax Court under any circumstances’’ (Pet. 6a).

Green Spring Dairy v. Commissioner, 208 F. 2d 471,

1H. Rep. No. 2, 70th Cong., Ist Sess. pp. 23-24 (1939-1

Cum. Bull. (Part 2) 384, 399-400); S. Rep. No. 960, 70th

Cong., Ist Ses:., pp. 31-32 (1939-1 Cum. Bull. (Part 2) 409,

431).

3

476-AT7 (C.A. 4th) ; Estate of Iacont v. Commissioner,

decided April 13, 1961 (P-H Memo T.C., par. 61,106) ;

Bartmer Automatic Self Service Laundry, Inc. v.

Commissioner, 35 T.C. 317; American Equitable

Assur. Co. of New York v. Helvering, 68 F. 2d 46

(C.A. 2d); Mutual Lumber Co. v. Poe, 66 F. 2d 904

(C.A. 9th), certiorari denied, 290 U.S. 706; Olds &

Whipple v. United States, 22 F. Supp. 809 (Ct. Cl.) ;

Umted States v. Shephard’s Estate, 196 F. Supp. 281

(N.D. N.Y.)

In short, it is clear from both the language of the

statute and the decided cases that the statute of limi-

tations was suspended as long as petitioner’; Tax

Court case was pending.

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

ARCHIBALD Cox,

Solicitor General.

APRIL, 1965.

2In United States v. ’Connor (291 F. 2d 520, 522 (C.A. 2)),

upon which petitioner relies, suit was brought before the statute

would have run, computing the statutory period without regard

to the suspension provisions of Section 277. Thus no issue of

the meaning of Section 277 was presented and the conflict

asserted by petitioner (Pet. 5-6) does not exist.

~

U.S. GOVERNMEAT PRINTING OFFICE 1965