Babetta Schmidt v. Commissioner of Internal Revenue

This case is before us upon petition to review a decision of the tax court rendered on redetermination of deficiency in income tax. Most of the facts which are important to our decision were stipulated. Petitioner, an elderly widow of foreign birth, whose income was derived from rents from real property which she owned, made it a practice to employ each year an accountant whom she entrusted to prepare her tax returns. This continued without incident through the year 1943. The accountant would leave the returns with the petitioner and she would file them. In the year 1944, this accountant prepared for the petitioner a declaration of estimated tax showing an estimated liability of $2473. She paid that sum in four equal installments within the time required by law. No declaration of estimated tax was filed for 1945. The accountant prepared declarations of estimated tax for the petitioner for the years 1946 and 1948 through 1951, which were filed on time; however, the returns, form 1040, for 1944 through 1949, and that for 1951, were not filed on time. The evidence showed that the accountant had been ill during this period and this accounted in part for petitioner’s delinquency.

When…