Appeal of M. FOX & SONS CO.

Appeal of M. FOX & SONS CO. Docket No. 5645. Decided July 21, 1926. Petitioner asserts that it is entitled to relief under sections 327 and 32S of the Revenue Act of 1918. Commissioner affirmed without consideration of merits of case because of insufficiency of proof. Charles H. Schnepfe, C. P. A., for'the petitioner. Joseph K. Moyer, Esq., for the Commissioner. Before Marquette, Mokeis, Green, and Love. In its income and profits-tax returns for the year 1919 the petitioner asserted that it was a personal service corporation and made its return as such. The Commissioner decided that it was not entitled to such classification and determined that there was a deficiency in income and profits taxes for the year in the sum of $8,052.17. , The petitioner, apparently acquiescing in the Commis•sioner’s conclusion that it was not entitled to classification as a personal service corporation, now asserts that its case is within the provisions of section 327 of the Revenue Act of 1918 and that it is entitled to have its tax determined as provided in section 328 of that Act. FINDINGS OF FACT. M. Fox & Sons Co. is a Maryland corporation with its principal place of business in Baltimore. During the year in question it operated an auction sales stable in which it sold horses and mules on commission. It also from time to time purchased horses and mules on its own account and sold them at its auctions. During the greater part of the year it carried on or held auction sales for the Government, at which it sold.horses and mules. Later in the year this activity was enlarged to include the sale of automobiles. These sales of Government property produced a substantial portion of its income. [MAJORITY — GReen:] OPINION. GReen: Section 327 of the Revenue Act of 1918 sets forth the cases in which the tax shall be determined as provided in section 328. There is no direct evidence that the Commissioner was able to determine the invested capital of the corporation, but it is obvious that he has done so. This eliminates paragraph (a) of section 327. Paragraphs (b) and (c) are inapplicable. Paragraph (d) relates to abnormalities affecting capital or income. We are unable to ascertain from the record the amount of invested capital allowed by the Commissioner and there is no evidence of any abnormality of either capital or income. The deficiency is $8,052.17. Order will be entered accordingly.