MARIS, Circuit Judge.
This is a petition to review an order of the Tax Court of the United States dismissing a petition for redetermination of income tax liability for the year 1955. The petitioner and his wife had received a letter dated October 26, 1956, from the Head of the Tax Division of the Department of Finance of the Government of the Virgin Islands of the United States which stated that $6,567.31 was due on their income tax for the year 1955. They had also received a letter dated February 15, 1957, likewise from the Head of the Tax Division of the Department of Finance of the Government of the Virgin Islands, which asserted an income tax deficiency and stated that the "District Court is apparently the Court of jurisdiction in the case of an appeal from the decision of this office" and "Unless a petition is filed with the Court for review or redetermination of the proposed deficiency, within 90 days of today's date," the proposed deficiency would be assessed.
On May 1, 1957, the petitioner filed in the Tax Court of the United States a petition "for redetermination of deficiency claimed by the Commissioner of Internal Revenue in notices of deficiency dated October 26, 1956 and February 15, 1957, attached hereto, Exhibits 1 and 2 [the above-described letters], as basis for this proceeding". The taxpayer also alleged that his "income tax return for the year 1955 was filed with the office of the Tax Division of the Department of Finance, Government of the Virgin Islands". The Commissioner of Internal Revenue filed a motion to dismiss on the ground that the Tax Court had not acquired jurisdiction because no statutory notice of deficiency, as authorized by Section 6212(a), Internal Revenue Code of 1954, 26 U.S.C. § 6212(a), had been issued by the Secretary of the Treasury of the United States or his delegate. The Tax Court decided that no appropriate notice of deficiency had been shown to have been given to the petitioner and that it, therefore, did not have jurisdiction to entertain the petition. Accordingly, it dismissed the proceedings. 28 T.C. 992.
The Tax Court is a judicial agency of the United States with limited statutory jurisdiction. Section 7442, Internal Revenue Code of 1954, 26 U.S.C. § 7442; Stern v. Commissioner of Internal Revenue, 3 Cir., 1954, 215 F.2d 701. In the case of a deficiency in income tax the Tax Court acquires jurisdiction to redetermine the deficiency only after a notice of deficiency, as authorized by section 6212(a) of the Internal Revenue Code of 1954, is mailed to a taxpayer who thereafter files a petition for redetermination within the appropriate time. Section 6213(a), Internal Revenue Code of 1954, 26 U.S.C. § 6213(a).
Only the Secretary of the Treasury of the United States or his delegate is authorized to mail a notice of deficiency. Section 6212(a), Internal Revenue Code of 1954. The Secretary of the Treasury delegated general authority over the functions of the Internal Revenue Service to the Commissioner of Internal Revenue. Treasury Department Order No. 150-2, May 15, 1952, 17 F.R. 4590, as made effective under the Internal Revenue Code of 1954 by Treasury Department Order 150-36, August 17, 1954, 1954-2 C.B. 733. In addition, the Secretary has stated in T.D. 6118, 1955-1 C.B. 698, 718-719:
Section 301.6212-1 of the Treasury Regulations authorize a district director or an assistant regional commissioner, appellate, to notify a taxpayer of a deficiency by registered mail.
We agree with the Tax Court that the alleged deficiency notice which formed the basis for invoking its jurisdiction here was not issued by the Secretary of the Treasury of the United States or his delegate. Indeed, the letters of October 26, 1956, and February 15, 1957, attached to taxpayer's petition for redetermination and which he states constitute the "basis for this proceeding" were not signed or issued by any officer of the United States. On the contrary, they show on their face that they were sent by an officer of the Government of the Virgin Islands, to wit, Reuben B. Wheatley, Head of the Tax Division of the Department of Finance of the territorial government.
Furthermore, the taxpayer alleges in his petition for redetermination that the income tax return for the year in dispute was filed with the Tax Division of the Department of Finance, Government of the Virgin Islands. He nowhere asserts that the tax was returned to the Government of the United States. Accordingly it is clear from the face of the petition and the alleged deficiency letters annexed thereto, that the deficiency here sought to be redetermined was not claimed by the Commissioner of Internal Revenue or by any officer of the United States. The Tax Court was, therefore, correct in ruling that the alleged notice of deficiency was not issued by the Secretary of the Treasury or his delegate. Since, as we have seen, the jurisdiction of the Tax Court is limited to redetermining deficiency determinations made by officers of the United States, namely, the Secretary or his delegate, with respect to certain specified taxes, the Court did not err in holding that it did not have jurisdiction in this case.
Moreover, we are satisfied that the tax here in dispute is actually not a tax of the United States but a territorial income tax and for this additional reason the Tax Court had no jurisdiction in the premises.
The territorial official who caused the notice of deficiency to be issued under the authority of the Government of the Virgin Islands upon which taxpayer bases his petition here was undoubtedly enforcing the following provision with respect to the Virgin Islands income tax contained in the Naval Appropriation Act of July 12, 1921:
The Virgin Islands Code, effective September 1, 1957, evidences that the quoted provision of the Naval Appropriations Act of July 12, 1921, continues in effect as the basis of the Virgin Islands income tax law. Thus 33 V.I.C. § 1931(15) provides:
The tax thus imposed by the Naval Appropriation Act was explained in Congress as providing for local imposition upon the inhabitants of the Virgin Islands of a territorial income tax, payable directly into the Virgin Islands treasury, to assist the Islands in becoming self-supporting.
Moreover, Congress itself has afforded recent evidence of its understanding and purpose that the Virgin Islands income tax is not to be administered by the Internal Revenue Service or other officers of the United States. Thus when Congress decided to extend to the Virgin Islands certain of the social security benefits and for that purpose to impose the taxes comprehended under the Federal Insurance Contributions Act, being sub-chapter A of Chapter 9 of the Internal Revenue Code of 1939, sections 1400-1432, and the Self-Employment Contributions Act, being subchapter E of chapter 1 of the Internal Revenue Code of 1939, sections 480-482, it added by section 208(b) of the Social Security Act Amendments of 1950 a new section 3811 to the Internal Revenue Code of 1939, as follows:
It thus appears from section 3811 that Congress understood that the provisions of the internal revenue laws of the United States relating to tax administration and enforcement, especially those relating to the Tax Court, were without application to the Virgin Islands. This inference is strengthened by the fact that Puerto Rico was included in the same category as the Virgin Islands since the tax laws of Puerto Rico were unquestionably administered locally and not by the Bureau of Internal Revenue. There would have been no necessity for specifically providing in section 3811 for collection and administration under the Secretary of the Treasury of the taxes referred to therein if the collection and administration of the income tax in the Virgin Islands had for many years already been under his direction and not administered and collected by local officers.
The section of the Internal Revenue Code of 1954 comparable to section 3811 of the 1939 Code is section 7651.
Under 33 V.I.C. §§ 942, 943, 944 and 1931(1), jurisdiction to review asserted deficiencies in income tax has been vested in the District Court of the Virgin Islands since September 1, 1957. Under the terms of section 22 of the Revised Organic Act
The order of the Tax Court will be affirmed.
FootNotes
"Except as otherwise provided in this subchapter and in sections 4705(b), 4735, and 4762 (relating to taxes on narcotic drugs and marihuana), and except as otherwise provided in section 28(a) of the Revised Organic Act of the Virgin Islands and section 30 of the Organic Act of Guam (relating to the covering of the proceeds of certain taxes into the treasuries of the Virgin Islands and Guam, respectively) —
"(1) Applicability of administrative provisions. — All provisions of the laws of the United States applicable to the assessment and collection of any tax imposed by this title or of any other liability arising under this title (including penalties) shall, in respect of such tax or liability, extend to and be applicable in any possession of the United States in the same manner and to the same extent as if such possession were a State, and as if the term `United States' when used in a geographical sense included such possession.
"(2) Tax imposed in possession. — In the case of any tax which is imposed by this title in any possession of the United States —
"(A) Internal revenue collections. — Such tax shall be collected under the direction of the Secretary or his delegate, and shall be paid into the Treasury of the United States as internal revenue collections; and
"(B) Applicable laws. — All provisions of the laws of the United States applicable to the administration, collection, and enforcement of such tax (including penalties) shall, in respect of such tax, extend to and be applicable in such possession of the United States in the same manner and to the same extent as if such possession were a State, and as if the term `United States' when used in a geographical sense included such possession.
"(3) Other laws relating to possessions. — This section shall apply notwithstanding any other provision of law relating to any possession of the United States.
"(4) Canal Zone. — For purposes of this section, the term `possession of the United States' includes the Canal Zone.
"(5) Virgin Islands. —
"(A) For purposes of this section, the reference in section 28(a) of the Revised Organic Act of the Virgin Islands to `any tax specified in section 3811 of the Internal Revenue Code' shall be deemed to refer to any tax imposed by chapter 2 or by chapter 21.
"(B) For purposes of this title, section 28(a) of the Revised Organic Act of the Virgin Islands shall be effective as if such section had been enacted subsequent to the enactment of this title." 26 U.S. C.A. § 7651.
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