any prior periods, was $93,164.92. The P. L. Howe Lumber Mills sustained an operating loss of $413,387.30 for the period from July 1, 1922, to December 1, 1922, when it was liquidated. The above figures do not include the loss of $264,900, alleged to have been sustained by petitioner from its investment in stock of the P. L. Howe Lumber Mills. On December 1, 1922, all of the assets of the P. L. Howe Lumber Mills were sold to the Brooks-Scanlon Lumber Company, for a total consideration of $500,000, which amount was insufficient to satisfy the claims of creditors. On May 1, 1922, and November 30, 1922, the total outstanding liabilities of the P. L. Howe Lumber Mills were substantially the same and amounted to approximately $1,100,000. In closing its books on June 30, 1923, the petitioner charged off as a loss the amount of $264,900, which represented cost of its stock in the P. L. Howe Lumber Mills. The amount of such loss, however, was not taken into account on its income-tax return for the fiscal year ended June 30, 1923, or on any other income-tax return. OPINION. LANSDON: The respondent concedes that petitioner sustained a loss by reason of its ownership of stock in the P. L. Howe Lumber Mills, but contends that such loss occurred in the fiscal year ended June 30, 1922. The petitioner contends that the stock became worthless in the fiscal year ended June 30, 1923, and that it is entitled to carry forward the resulting net loss for the two succeeding taxable years. There is no controversy over the cost of the stock to petitioner or over the fact of its worthlessness. The facts disclose that on May 1, 1922, the petitioner entered into an agreement with certain creditors of the P. L. Howe Lumber Mills providing for a future liquidation of that company. Liquidation, pursuant to the contract, was completed on December 1, 1922, when all the assets and business were sold to the Brooks-Scanlon Lumber Company for an amount insufficient to satisfy the claims of creditors. On May 1, 1922, it was certain that petitioner would sustain a loss on its investment in the stock of the P. L. Howe Lumber Mills, but we do not think it was certain that it would lose its entire investment. At that time the company was still a going concern, with a large plant and equipment, timber holdings and an inventory of finished goods. The respondent points to the agreement of May 1, 1922, where it is stated, "it has become manifest and is now conceded by all the parties hereto that the capital stock of the Lumber Company has no present or prospective value whatsoever except as a convenient means of holding its assets and liquidating its affairs"; and says that the petitioner, itself, recognized that the stock was worthless. It should be noted, however, that in paragraph 8 the agreement provides that the balance, if any, remaining from the liquidation should be paid to the petitioner. We do not think the petitioner was obligated to write off the loss from its investment when it was first determined to liquidate the company. We think petitioner is entitled to take its loss after the liquidation was completed, when all the assets had been sold and nothing remained for the stockholders. It was then certain, for the first time that nothing would be realized from its investment. Cf. H. Liebes & Co., 23 B. T. A. 787. The respondent contends that the agreement of May 1, 1922, resulted in the transfer of the business and assets of the P. L. Howe Lumber Mills, which terminated the affiliation existing between petitioner and that corporation. He contends that the petitioner was required to file a consolidated return for the period up to May 1, 1922, and a separate return for the period May 1, 1922, to June 30, 1922. We do not agree with such a construction of the instrument. The petitioner continued to own its stock in the P. L. Howe Lumber Mills and any transfer was to give the creditors' committee power to liquidate the business. On December 1, 1922, all of the assets and business were sold and operations of the P. L. Howe Lumber Mills ceased. The affiliation between petitioner and its subsidiary was not terminated prior to that date. The facts of this proceeding, with reference to whether a "net loss may result from stock in a subsidiary corporation becoming worthless, are very similar to those in H. Liebes & Co., supra, where we allowed the petitioner to carry forward the amount of such a loss to the two succeeding taxable years. In accordance with our opinion in that case, we conclude that petitioner is entitled to carry forward the "net loss," if any, for the fiscal year ended June 30, 1923, to the two succeeding taxable years. Decision will be entered under Rule 50. SPENCER K. MULFORD, SR., PETITIONER, V. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. Docket No. 33490. Promulgated January 19, 1932. 1. STATUTE OF LIMITATIONS. barred. Collection of the deficiency held not 2. Id. WAIVERS-DURESS. It is not duress on the part of the Robert A. Littleton, Esq., for the petitioner. This proceeding is for the redetermination of a deficiency in income tax for the calendar year 1917, amounting to $36,354.47. The only ground of error alleged by the petitioner is that the collection of the deficiency was barred by the statute of limitations at the time it was assessed under the jeopardy assessment of December 23, 1925, and is still barred. FINDINGS OF FACT. Petitioner is an individual residing at Wyncote, Pennsylvania, and filed his income-tax return for the calendar year 1917 with the collector of internal revenue at Philadelphia, on March 30, 1918. To sustain his contention that the statute of limitations has not barred the collection of the asserted deficiency, the respondent relies upon three written documents, referred to as "income and profits tax waivers." The first of said documents bears the date of February 5, 1923, is signed by both the taxpayer and the Commissioner, and reads as follows: INCOME AND PROFITS TAX WAIVER In pursuance of the provisions of subdivision (d) of Section 250 of the Revenue Act of 1921 (Spencer K. Mulford) of (Wyncote, Pennsylvania) and the Commissioner of Internal Revenue, hereby consent to a determination, assessment, and collection of the amount of income, excess-profits, or war-profits taxes due under any return made by or on behalf of the said ( for the years (-) under the Revenue Act of 1921, or under prior income, excess-profits, or war-profits tax Acts, or under Section 38 of the Act entitled "An Act to provide revenue, equalize duties, and encourage the industries of the United States, and for other purposes," approved August 5, 1909, irrespective of any period of limitation. This waiver expires one year from date. At the time this waiver was signed the only contested tax liability which petitioner had pending before the Bureau of Internal Revenue was that which related to the calendar year 1917. On December 10, 1923, petitioner signed another assessment and collection waiver in regular form covering the year 1917 and the same was filed with the Bureau on December 15, 1923. This waiver, by its terms, expired December 31, 1924. On December 8, 1924, another assessment and collection waiver concerning the year 1917, in regular form, was filed, extending the limitation for assessment and/or collection until December 31, 1925. The additional tax which the Commissioner was asserting was assessed December 23, 1925. After the Commissioner made the assessment, a claim in abatement was filed and the same was rejected by the Commissioner in his notice of final determination dated 128445°-33-21 November 4, 1927, from which notice the taxpayer brings this proceeding. Shortly prior to December 10, 1923, James A. Councilor, certified public accountant of Washington, D. C., was employed by the taxpayer as his attorney in fact to represent him before the Bureau of Internal Revenue. On or about December 8, 1923, the said Councilor filed with the Bureau of Internal Revenue his power of attorney from the taxpayer to act as his legal representative before the Bureau in his tax matters for the year 1917. The power of attorney from the taxpayer to Councilor was the first evidence filed with the Bureau that Councilor was the legal representative of the taxpayer. On December 10, 1923, Councilor, as the legal representative of the taxpayer, received a telephone call from an official of the Bureau by the name of Phillips, who stated to said Councilor that there was on file with the Bureau an income-tax waiver by the taxpayer for the year 1917 that would expire in a short time after December 10, 1923, and that, unless a renewal waiver were filed by the taxpayer immediately, an immediate assessment of the deficiency in tax then proposed would be made. Relying on said statement of an official of the Bureau, that the taxpayer had theretofore given a waiver for the year 1917 for a later determination, assessment and collection of taxes for the year 1917, that would shortly expire, and, unless renewed, an immediate assessment of a tax would be made, the said Councilor, on December 10, 1923, wrote a letter to the taxpayer's son, Spencer K. Mulford, Jr., who was looking after his father's personal matters, including all his tax matters. Said letter was as follows: RE: SPENCER K. MULFORD, SR. MAHLON R. BRYAN The Revenue Bureau is willing to grant further extensions in the above matters if new waivers are granted. The ones now on file expire about the end of this year. In the absence of such waivers they will assess the tax as it now stands. I have, therefore, told them that we would secure these waivers immediately. I am, therefore, enclosing an original and duplicate copy of such documents to be signed by both your father and Mr. Bryan. You will note that I have limited these to expire December 31, 1924. Will you please have the originals executed and returned to me at once, keeping the duplicate for your file. The taxpayer's son received said letter of December 10, 1923, and either showed the letter to his father, or stated to him the contents, and handed to him for signing the enclosed waiver for the year 1917. The waiver enclosed in Councilor's letter of December 10, 1923, is dated as of the date of December 10, 1923, and was signed by the taxpayer and filed with the Bureau. Afterwards it was signed by the Commissioner. When the official of the Bureau called Councilor, the taxpayer's representative, on December 10, 1923, and stated that the waiver on file by the taxpayer for 1917 was about to expire and requested the execution of a new waiver for 1917, or an assessment would be made, Councilor did not know that there was a waiver on file for 1917, and when he advised the taxpayer to execute the waiver of December 10, 1923, he relied upon the representation by an official of the Bureau that a prior waiver for 1917 had been executed by the taxpayer and was on file with the Bureau. The waiver of December 8, 1924, was executed upon the same reliance. OPINION. BLACK: In support of his allegation that collection of the deficiency is barred by the statute of limitations, petitioner assigns the following reasons: 1. Because the document of February 5, 1923, does not specify the year for which it was given, it is void as a waiver for the year 1917. 2. The statement by an official of the Bureau on December 10, 1923, to the taxpayer's legal representative, that there was a waiver on file for the year 1917 that would shortly expire, was the misrepresentation of an existing fact, made for the purpose of inducing the taxpayer to execute the waiver of December 10, 1923, as the renewal of a prior waiver. 3. The waiver of December 10, 1923, was induced by the misrepresentation of an existing fact; obtained under duress, and is void. 4. The waiver of December 8, 1924, is the renewal of prior void waivers, and is also void. 5. The deficiency assessed and proposed to be collected is barred by the statute of limitations, and there is no deficiency in tax due from the taxpayer for the year 1917. The reasons relied upon by petitioner in support of his contention that the deficiency is barred by the statute of limitations are so closely related that they may be discussed together, without treating them separately. If the waiver executed by petitioner on February 5, 1923, is valid to arrest the running of the statute of limitations against collection of the tax due under petitioner's return for the calendar year 1917, admittedly petitioner's appeal fails. His whole contention that the collection of the deficiency is barred by the statute of limitations is based upon the proposition that the waiver filed February 5, 1923, is void for uncertainty. The blank space contained in the waiver for the insertion of the year or years to which it was applicable was not filled in and petitioner contends that such space should have been filled in with the figures "1917" and that because this was not done, the waiver is void for uncertainty. We do not agree to this contention. The evidence shows that the only contested tax case which the petitioner had pending with the Bureau of Internal Revenue at the time this waiver |