Spreckels

The taxpayer, a resident of San Francisco, was engaged in the business of purchasing and selling stocks, bonds, and commodities for profit. He maintained an office with employees, and kept a complete set of books on the cash receipts and disbursements basis.

Adolph B. Spreckels’ income tax return for 1934, which was filed with the collector for the first district of California on May 9, 1935, disclosed a net taxable income of $121,593.86 and a tax of $37,897.60; the tax was paid in installments, the last of which, in the sum of $9,474.40, was made December 16, 1935. December 23, 1937, the taxpayer filed a claim for refund of income tax in the amount of $4,087.61, upon the ground that certain stamp taxes were paid which had not been claimed as deductions in the return. The Commissioner, in the deficiency letter, dated July 20, 1938, allowed this claim, with the exception of $80. This letter from the Commissioner to-the taxpayer relative to' tax liability, for the year 1934, however, asserted a deficiency in income tax for that year in the sum of $1,254.11, arising out of transactions not important here. Thereafter, on September 26, 1938, the taxpayer filed a. petition for…