
    HANDLEY MOTOR COMPANY, INC. v. THE UNITED STATES
    [No. 101-62.
    Decided November 13, 1964]
    
      
      Mare E. Bettius for plaintiff. George D. Webster, and Davies, Biohberg, Typings, Lrnda <& Duff were on the brief.
    
      Gilbert W. Bubloff, with, whom was Assistant Attorney General Loms F. Oberdorfer, for defendant. G. Moxley Featherston, Lyle M. Turner, and Philip B. Miller were on the brief.
    Before Cowen, Chief Judge, Laramorb, Dureee, Davis, and Collins, Judges.
    
   Cowen, Chief Judge,

delivered the opinion of the court :

Plaintiff seeks a refund of excise taxes, interest and additions to tax for non-filing, arising out of the purchase of 50 Volkswagen automobiles in Europe. Two principal issues are presented for our determination: (1) Is plaintiff the “importer” of the automobiles and therefore liable for the excise tax upon their sale as provided in 26 U.S.C. (I.K.C. 1954) § 4061 (1958 Ed.) ? (2) Was plaintiff’s failure to file an excise tax return “due to reasonable cause and not due to willful neglect”, thereby rendering the addition to tax imposed by 26 U.S.C. (I.E.C. 1954) § 6651 (1958 Ed.) inapplicable ?

The findings of fact made by the trial commissioner have been accepted by both parties but each has requested additional findings. After, a study of the record, we have denied these requests but have added one finding of ultimate fact.

Plaintiff is a corporation doing business in the District of Columbia and is principally engaged in the retail sale of automobiles. Its main product line is Ford motor cars.

On November 10,1958, the Amerifact Corporation of New York City placed an advertisement in a trade publication, stating that it would ship Volkswagen automobiles, equipped to meet American safety requirements, directly from Germany and thait the cost would be about $1,575, including freight to New York, duty, insurance, and brokerage. Amerifact was regularly engaged in the importation of notions and novelties but not automobiles.

Mr. Ernest Apfelbaum, secretary-treasurer of Amerifact, had learned through Kohlig & Company, a German freight forwarding concern, that Armin Wiedemann, a German automobile dealer, was willing to sell Volkswagens to American firms, f.o.b. Hamburg, at a price of $1,300 per unit, plus $35 for the equipment necessary for American safety standards. Amerifact revised its advertisement on December 8,1958, to state that the Volkswagens “would be shipped” at a price of $1,360, f.o.b. Hamburg, Germany, and that the total cost, including freight to New York and the additional items mentioned above, would amount to about $1,575 per automobile.

Plaintiff was interested in obtaining new Volkswagens at the advertised price and during the latter part of November 1958, the plaintiff authorized John B. O’Connell of the Fidelity Union Trust Company of Newark, New Jersey, to make arrangements for the purchase of not more than 50 Volkswagens at a unit price of $1,360 to be paid on delivery at a specified port. Since 1954, Fidelity had assisted plaintiff in financing the sale of its automobiles. Most of such assistance was extended through Mr. O’Connell, who was then assistant treasurer of Fidelity.

Thereafter, in the course of telephone conversations with Mr. ■ Apfelbaum, Mr. O’Connell, who had had no previous contact with Amerifact, stated his interest in obtaining the Volkswagens at the prices advertised, provided a clear title could be obtained when payment was made. On December 1, 1958, Fidelity sent a letter to Amerifact, authorizing it to draw upon Fidelity for the purchase by plaintiff (whose business address was stated) of 50 new Volkswagens at $1,360 per unit to be paid after delivery of the autos in December 1958 at the Port of Baltimore. The letter stated that the $1,360 included a unit cost, f.o.b. Hamburg, of $1,300, plus $25 purchase commission, and $35 for the installation of safety glass windshields, turn signals, and sealed beam lamps. The letter also required the drafts to be accompanied by a commercial invoice from a German automobile dealer in plaintiff’s name, a consular invoice, a German title for each automobile, and on board ocean bills of lading marked “freight collect”, issued to the order of the shipper, and duly endorsed.

On the basis of the letter from Fidelity, Amerifact secured from the Bankers Trust Company of New York an international letter of credit, guaranteeing payment to Koh-lig & Company, which was to act as the freight forwarder for Mr. Wiedemann, the German automobile dealer. In reliance on the letter of credit, Mr. Wiedemann delivered the Volkswagens to the freight forwarder for shipment to plaintiff in Baltimore, Maryland, on a price basis, f.o.b. Hamburg. Pursuant to the requirements stated in Fidelity’s letter of December 1,1958, Mr. Wiedemann furnished the freight forwarder German titles to the automobiles and commercial invoices in which Wiedemann was listed as consignor and plaintiff as consignee. Bohlig & Company then prepared consular invoices, listing the seller of the automobiles as “by order of Bohlig & Company” and the purchaser as plaintiff. Bohlig also received bills of lading in which Bohlig, was listed as shipper and plaintiff as the recipient. The documents mentioned1 were forwarded by Bohlig to Bankers Trust Company, which sent them to Fidelity. All such documents were then forwarded to plaintiff by Fidelity. In none of the documents was Amerifact named as vendor, vendee, consignor, consignee, shipper, recipient, exporter, or importer.

When the automobiles arrived in Baltimore with freight charges due, Fidelity sent a Baltimore freight forwarder copies of the bills of lading, customs invoice, and commercial invoice, and authorized the forwarder to release the vehicles to plaintiff upon payment of the freight and customs duty. After payment of such charges, plaintiff authorized the freight forwarder to deliver the automobiles to a trucking concern, which transported them from Baltimore to plaintiff’s place of business in Washington, D.C.

Upon receipt of the Yolkswagens, plaintiff discovered that some had not been equipped with the required safety glass or sealed beam headlights, and sent Amerifact an invoice for the cost of installing the additional equipment. Ameri-fact thereupon sent the bill to Mr. Wiedemann who paid it.

In order to secure certificates of title from the District of Columbia, plaintiff requested and obtained from Ameri-fact bills of sale conveying the latter’s right, title, and interest in each car to plaintiff. On the basis of these bills of sale, plaintiff’s application listing Bohlig & Company of Hamburg as plaintiff’s source of ownership, and other papers, certificates of title were issued by the District of Columbia.

Throughout the business dealings described above, nothing was said by Mr. O’Connell, Mr. Apfelbaum, Bankers Trust Company, or plaintiff, regarding the payment of or liability for an excise tax on the Yolkswagens.

There is a direct conflict in the testimony of Mr. O’Connell and that of Mr. Apf elbaum on important aspects of the transaction concluded between them. Mr. O’Connell maintained that the automobiles were purchased from Amerifact with the understanding that the European end of the deal would be handled by a partner of Amerifact residing in Europe, whereas Mr. Apfelbaum testified he informed Mr. O’Connell that Amerifact could obtain the Volkswagens in Europe on a brokerage basis and would expect to be paid a brokerage fee of $25 per car. Mr. Apfelbaum’s version was accepted by the trial commissioner, whose findings of fact we have adopted. Plaintiff has not made a showing sufficient to overcome the presumption accorded by our rules to these findings of the trier of the facts.

I

The excise provided in section 4061 is levied on the first sale in the United States by a manufacturer, producer or importer. Indian Motocycle Co. v. United States, 283 U.S. 570 (1931) ; U.S. Truck Sales Co. v. United States, 229 F. 2d 693 (6th Cir. 1956). A determination of who is the “importer” does not in the first instance turn on the law of sales. We think the “importer” is the first purchaser resident in the United States who arranges (as principal and not as an agent) for the goods to be brought into the United States, Rev. Rul. 60-106, 60-1 C.B. 490; cf. Rev. Rui 56-409, 56-2 C.B. 796. The “importer” may in fact take title in the United States from the foreign seller, cf. Hooven & Allison Co. v. Evatt, 324 U.S. 652, 662-663 (1945); Blumenthal Print Works v. United States, 51 F. Supp. 208, 212 (E.D. La. 1943). To make the definition of “importer” turn exclusively on the place of sale would, in many instances, place the tax on a person or corporation who is resident in a foreign country, and who, as a practical matter, would be inaccessible to collection procedures. The issue of “transfer” and “title passage” under the law of sales may be pertinent when it is necessary to establish which of two resident persons or corporations is the “importer”, see e.g. Amtorg Trading Corporation v. Higgins, 150 F. 2d 536 (2d Cir. 1945). The parties in this action have assumed that either Amerifact or plaintiff is the importer.

The facts in this case, when reviewed in their entirety, are consistent with the trial commissioner’s finding to the effect that Amerifact acted as a broker or finder for plaintiff. Fidelity’s letter of December 1, 1958, made specific reference to a purchase commission and required that commercial invoices be issued by a German automobile dealer in the name of plaintiff. Plaintiff paid all the freight charges and customs duties; the shipping and transfer documents listed plaintiff and not Amerifact as the purchaser or consignee ; Amerifact was not an established automobile dealer. Plaintiff received the automobiles directly from the European seller and made all the arrangements required for their receipt and delivery to its place of business. The evidence does not establish that Amerifact was to enter into' the chain of title. Plaintiff may be viewed either as the first purchaser resident in the United States, or as the person or corporation primarily responsible for the entry of the automobiles into the United States as a matter of fact.

Accordingly, we hold that plaintiff was the importer of the Volkswagens in issue and became liable for the excise due when it sold them in this country, since there had been no previous sale by a manufacturer, producer, or importer.

II

Because of plaintiff’s failure to file an excise tax return with respect to the sale of the automobiles involved here, the Commissioner of Internal [Revenue assessed a penalty pursuant to the provisions of Section 6651 of the 1954 Internal Eevenue Code. The importance of the timely filing of tax returns in our system of self-assessment was emphasized by the Supreme Court in Commissioner v. Lane-Wells Co., 321 U.S. 219, 223 (1944) and the numerous penalties with which nonfiling has been surrounded disclose a congressional policy to encourage the filing of tax returns. Spies v. United States, 317 U.S. 492, 495 (1942).

The term “reasonable cause” in section 6651 has been interpreted to mean no more than the exercise of ordinary business care and prudence. In re Fisk's Estate v. Commissioner, 203 F. 2d 358 (6th Cir. 1953); Haywood Lumber & Mining Co. v. Commissioner, 178 F. 2d 769 (2d Cir. 1950). The burden of the proof is on the taxpayer to prove reasonable cause for failure to file a return when required to do so under the provisions of the Internal Kevenue Code. Breland v. United States, 323 F. 2d 492, 497 (5th Cir. 1963); Paymer v. Commissioner, 150 F. 2d 334, 337 (2d Cir. 1945). Whether the elements which constitute reasonable cause are present is a question of fact to be determined in each case. Orient Investment & Finance Co. v. Commissioner, 166 F. 2d 601, 604 (D.C. Cir. 1948).

Plaintiff maintains that it filed no return because it believed, in good faith, that no tax was due since plaintiff considered Amerifact to be the seller and importer of the automobiles. The record shows that at no time during the transaction was the question of an excise tax discussed by any of plaintiff’s officers, by Mr. O’Connell, or, by Mr. Apfel-baum. In the discussions between Mr. O’Connell and Mr. Apfelbaum and between plaintiff’s vice president and Mr. O’Connell, specific mention was made of the cost of the automobiles, the safety equipment, freight charges, a purchase commission, and customs duties, but no reference was made to excise taxes. Through its dealings with the Ford Motor Company, plaintiff was aware of the fact that Ford’s invoices included an item for excise taxes, although there is no evidence that plaintiff had previously filed excise returns or had directly paid excise taxes on automobiles.

Mr. O’Connell testified that he never considered the question of an excise tax in connection with the transaction. Plaintiff’s vice president testified that: the matter of an excise tax was never considered by plaintiff; plaintiff was never informed that an excise tax had been paid; plaintiff sought no legal or professional advice as to whether such a tax was due; plaintiff would never have purchased the automobiles if it had known that an excise tax would be due; plaintiff was willing to buy the automobiles at the net price quoted and did not care who the seller was. While we do not question the good faith of plaintiff’s officers, it is apparent that plaintiff paid little, if any, attention to the tax incidents of the transaction. Therefore, we have found that plaintiff has not shown by a preponderance of the evidence that it exercised ordinary business care and prudence in connection with its failure to file an excise tax return.

Plaintiff relies on Palm Beach Trust Co. v. Commissioner, 174 F. 2d 527 (D.C. Cir. 1949), cert. den., 338 U.S. 825, reversing 9 T.C. 1060; and Estate of Oei Tjong Swan, 24 T.C. 829 (1955). An examination of the Tax Court’s opinion in Palm Beach shows that in contrast to the case at bar, there were, in addition to the taxpayer’s belief, several circumstances which two dissenting judges considered sufficient to prove reasonable cause. In that case, which involved a surtax on the undistributed income of a personal holding company, the taxpayer was organized and operated as a bank under Florida law and, as such, literally fell within the definition of a bank in a section of the Internal Revenue Code that excluded banks from the tax on personal holding companies. Further, the Commissioner of Internal Revenue had not required the taxpayer to file returns for prior, years. We infer that the Court of Appeals relied upon these additional circumstances in holding that the failure to file the return was due to reasonable cause.

The Swan case was one in which there was a delayed tax return rather than a failure to file. There, the taxpayer, who was obligated to file an estate tax return, resided in Holland, which was occupied by German troops at the time of decedent’s death and for several years thereafter. The physical impossibility of filing the return during the military occupation, plus other circumstances detailed in the opinion of the Tax Court, led it to decide that the delay in filing the estate tax return was due to reasonable cause. The decision does not support plaintiff’s position.

It is generally recognized that the presence of certain factors, in addition to the honest belief of the taxpayer, constitutes reasonable cause for the failure to file a return, e.g., the advice of a competent accountant or attorney; Mayflower Investment Co. v. Commissioner, 239 F. 2d 624 (5th Cir. 1956); Hatfried, Inc. v. Commissioner, 162 F. 2d 628 (3d Cir. 1947) ; or reliance on the statements of an Internal Revenue agent, Druggists’ Supply Corp., 8 T.C. 1343 (1947).

We do not hold that a taxpayer’s reliance upon the advice of an attorney, accountant, or revenue agent is an indispensable element of reasonable cause, for as shown in Estate of Oei Tjong Swan, supra, there are other elements which may be sufficient to establish that the taxpayer exercised ordinary business care and prudence. However, after a careful review of the record, we are impelled to conclude that the evidence offered by plaintiff is insufficient to discharge the burden imposed upon the taxpayer by section 6651. West End Co., 23 T.C. 815 (1955). Plaintiff’s petition is dismissed.

FINDINGS OF FACT

The court, having considered the evidence, the report of Trial Commissioner William E. Day, and the briefs and argument of counsel, makes findings of fact as follow:

1. The plaintiff herein, Handley Motor Company, Inc. (hereinafter called “Handley”), is a corporation organized under the laws of the State of Delaware with principal offices located at 6323 Georgia Avenue, N.W., Washington 11, D. C. It is engaged in the retail business of selling automobiles and related items.

2. Handley is on the accrual method of accounting and its books are kept on a fiscal year basis, ending July 31st.

3. (a) On or about November 15, 1961, the defendant, acting through the duly qualified and appointed District Director of Internal Revenue in Baltimore, assessed certain Federal excise taxes, a delinquency penalty, and interest thereon, in the total amount of $11,322.66, for the period January 1, 1959, through September 30, 1959, against Handley.

(b) On November 30, 1961, Handley paid the aforestated amount of excise taxes, delinquency penalty, and interest, in the total amount of $11,322.66, to the District Director of Internal Revenue, Baltimore, Maryland. ■

4. On or about December 23,1961, within the time allowed by the statute, a claim for refund (Form 843) was duly filed by Handley with the District Director of Internal Revenue, Baltimore, Maryland. Such claim for refund was in the amount of $11,322.66, or for such other amount properly allowable, plus statutory interest allowed by law. This claim for refund covered the period January 1, 1959, through September 30, 1959.

5. The claim for refund, filed as stated in the foregoing finding, was formally rejected by the defendant by notice dated March 12, 1962.

6. No part of the aforestated Federal excise taxes or penalty for the period January 1, 1959, through September 30, 1959, has been refunded or repaid to Handley, although Handley has duly demanded the same.

7. This action was timely instituted by TIandley on April 4, 1962.

8. No action upon this claim, other than that herein stated, has been taken before Congress or any of the Departments of the United States Government or in any court other than the filing of the petition in this court.

9. Since approximately 1954, Fidelity Union Trust Company, Newark, New Jersey (sometimes hereinafter called “Fidelity”), has assisted Handley in financing the sale of its automobiles. Mr. John B. O’Connell (sometimes hereinafter called “O’Connell”), then assistant treasurer and presently a vice president of Fidelity, performed most of the work by Fidelity in connection with this financing.

10. Amerifact Corporation (hereinafter referred to as “Amerifact”), with offices in New York City, is engaged primarily in the exportation and importation of novelties and notions. In 1958, its secretary-treasurer, Ernest Apfelbanm, was advised by Rohlig & Company (hereinafter referred to as “Rohlig”), a German shipping and freight forwarding concern, that certain German automobile dealers were interested in exporting Volkswagen automobiles to American ear dealers. Apfelbaum contacted one such German dealer, Armin Wiedemann, who confirmed his willingness to sell Volkswagens to American firms, f.o.b. Hamburg, Germany, at the going market price of $1,300 per unit plus $35 for installation of specified equipment necessary for American safety standards. Wiedemann also stated that he could ship Volkswagens to purchasers in the United States at all times and on short notice.

11. On November 10,1958, Amerifact placed an advertisement in the trade publication, ‘ * Automotive News, ’ ’ as follows:

VOLKSWAGENS
Will ship new Volkswagens directly from Germany within four weeks — sedans or Sunroofs. Sealbeams, direct, signals, AS 1 windshields, leatherette upholstery, mileage speedometer. Cars will stand you about $1,575, including freight to N. V., duty, ins. brokerage. We also ship to other U.S. ports. Ghias, convertibles also available. Minimum 18 cars. Write or phone:
AMERIFACT CORPORATION 54 Franklin St., New York City BE 3-6510
Finest bank references available.

To avoid having to clarify the terms of the advertisement over the telephone to each prospective customer, this advertisement was revised sometime between November 10, 1958, and December 8, 1958. The revised advertisement of December 8th reads as follows:

VOLKSWAGENS New 1959s
Shipped from Hamburg, Germany, $1,360, Sedans or Sunroofs
Seaibeams, directional signals, mileage speedometers, AS 1 windshields. These ears will stand you about $1,575 each including your freight to New York, duty, insurance, brokerage. Inquire for rates to other U.S. ports. Write or phone:
AMERIFACT CORPORATION 54 Franklin Street, New York City BEekman 3-6510

12. In the latter part of November, following a discussion of Amerifact’s November 10th advertisement, the plaintiff authorized John B. 0 ’Connell to handle the necessary arrangements for the purchase, by the plaintiff, of not more than 50 Volkswagens at a price of $1,360 each. This authorization was reduced to writing by the president of the plaintiff company on November 26, 1958, in a letter to the Fidelity Union Trust Company, Newark, New Jersey, to the attention of Mr. O’Connell, which reads as follows:

Confirming our telephone conversation of this morning, you are hereby authorized to pay for our account the purchase price for not exceeding fifty (50) Volkswagons [sic], purchased through the Amerifact Corp., at a price of $1360.00 each. Payment is to be made when the ears are delivered to a specified port.
Thank you for your cooperation in this matter.

13. In the meantime, O’Connell had called Amerifact by telephone and had spoken to Mr. Ernest Apfelbaum, its secretary-treasurer. There is a conflict in the evidence as to the purport of these discussions but it is clear that, from O’Connell’s standpoint, he was mainly interested in the price at which the Volkswagens could be supplied and, also, in assuring that clear title to the vehicles would be obtained when payment was effected. Apfelbaum told O’Connell that Amerifact could obtain Volkswagens in Germany at the then market price of $1,300 on a brokerage basis, that they could be Americanized (by changing the windshield and headlights) for $35 by their German principals, and that Amerifact would expect $25 per car as their brokerage fee in the transaction.

14. The plaintiff had never previously purchased any cars abroad.

15. O’Connell never previously had any contact with Amerifaet or its officers.

16. The Fidelity Union Trust Company, on December 1, 1958, sent a letter to Amerifaet, to the attention of Mr. Ernest Apfelbaum, which reads as follows:

You are hereby authorized to draft on us for the purchase of up to fifty (50) new Volkswagens, model 1959, at $1,360.00 per unit, by Handley Motor Co., Inc., of 6323 Georgia Avenue, N.W., Washington, D.C., after December, 1958 delivery, to the Port of Baltimore, Maryland, U.S.A. It is understood that the above price includes the unit cost F.O.B. Hamburg, Germany, at $1,300.00 plus $25.00 purchase commission and $35.00 for installation of AS1 Wind Shields, Turn Signals, and Sealed Beam Lamps. Your drafts must be accompanied by:
1. Commercial invoice in triplicate, issued by a German automobile dealer in the name of Handley Motor Co., Inc.
2. Consular Invoice in duplicate.
3. German title (Kraftfahrzeugbrief) for each automobile shipped.
4. On Board Ocean Bills of Lading, marked “freight collect” issued to the order of shipper, duly endorsed, evidencing shipment of Volkswagens.
This authorization applies to the above transaction only. We require that you secure specific authorization in writing from us before drafting on us for any additional purchase by Handley Motor Co., Inc.

This letter was signed on behalf of Fidelity by R». S. Ashley, vice president, and J. B. O’Connell, assistant treasurer.

17. Apfelbaum presented Fidelity’s letter of commitment to the Bankers Trust Company, New York, New York (sometimes hereinafter referred to as “Bankers”), pursuant to his discussion with O’Connell. Bankers issued a “back-to-baek” or international letter of credit by which, on the strength of Fidelity’s commitment, it guaranteed payment to Rohlig, which was to act as the freight forwarder for the German automobile dealer, Wiedemann.

18. On the basis of the international or “back-to-back” letter of commitment, Wiedemann delivered 50 Volkswagen automobiles, in 2 shipments of 39 and 11, respectively, to Rohlig for f.o.b. shipment to Handley in Baltimore, Maryland. Wiédemann also furnished Rohlig with German title to 33 of the automobiles as well as commercial invoices (Rechnung) per request contained in Fidelity’s letter of December 1,1958. Rohlig prepared consular invoices and received bills of lading, forwarding them to Bankers, together with the documents furnished by Wiedemann. Bankers, in turn, delivered the requested documents for 39 of the automobiles to Fidelity, by letter dated January 7, 1959, with an accompanying draft on Fidelity for $53,040. Thereafter, Bankers sent a similar letter, accompanied by documents and draft, to Fidelity for the remaining 11 automobiles. Since only 33 German titles had been furnished, Bankers agreed, in its letter of January 7, 1959, to indemnify Fidelity in the event titles to the other automobiles were not delivered.

19. The Commercial invoices (Rechnung), prepared by Wiedemann, as consignor, named Handley as consignee. The consular invoices listed the seller of the automobiles as by order of Rohlig & Co., and the purchaser as Handley Motor Co., Inc. The original bills of lading listed Rohlig as shipper and Handley as recipient. None of the documents furnished by Bankers to Fidelity, pursuant to Fidelity’s letter of commitment, named Amerifact as either vendor, vendee, consignor, consignee, shipper, recipient, exporter, or importer. Handley received copies of each of these documents.

20. The first 39 vehicles were shipped under a bill of lading marked — “Freight collect” and “Drawn under Bankers Trust Company New York, Credit No. 30 315 dated December 4, 1958,” for carriage to Baltimore.

21. Fidelity Union Trust Company, by J. B. O’Connell, on January 19,1959, sent to Lep Transport, e/o R. G. Hobelmann Company (both freight forwarders)—

Two (2) Original Copies of Bill of Lading Special Customs Invoice Regular Invoice (Rechnung)

as to each of the 39 vehicles contained in the first shipment. Those firms were authorized, by the letters of transmittal of that date, to release the vehicles to the plaintiff or its authorized agent with freight and duty charges to be paid by the plaintiff.

22. On January 21, 1959, the plaintiff wrote to the Hobel-mann firm, authorizing it to deliver the 39 vehicles to Howard Sober, Inc., which was apparently the firm that actually transported the vehicles from Baltimore, Maryland, to the plaintiff’s facility in Washington, D. C.

23. The plaintiff paid, through the Hobelmann firm, all ocean freight and customs charges.

24. The same arrangements as to receipt for and delivery of the balance of 11 vehicles to the plaintiff, as those relating to the 39 vehicles, were carried out.

25. The Bankers Trust Company’s drafts upon Fidelity Union Trust Company, presented in accordance with letter of commitment of December 1, 1958 (quoted in finding 16), were paid by Fidelity. The evidence is convincing that payment for the vehicles was not made to Amerifact.

The inference is quite strong that when Bankers received payment of its drafts, it paid either the automobile dealer in Germany (Wiedemann), or its agent (Rohlig).

No record of Bankers, which might show otherwise, was introduced in evidence by the plaintiff.

26. The first 39 vehicles, when received by the plaintiff, had not been equipped with safety glass windshields or sealed beam headlights. These were installed by the plaintiff. Thereafter, an invoice in the sum of $874, for the cost of such installation, was sent by the plaintiff to Amerifact. Upon receipt by the latter firm, it forwarded the plaintiff’s invoice to its principal in Germany (Wiedemann) and the bill was paid by that firm.

27. The plaintiff, in order to obtain certificates of title to the 50 Volkswagens from the District of Columbia Department of Vehicles and Traffic, requested Amerifact to send it a bill of sale for each vehicle. Amerifact prepared, on a printed form, and sent to the plaintiff for each car, a bill of sale in which it conveyed its right, title, and interest in each ear. Based upon an application for a title for each vehicle, executed by the plaintiff, which listed Eohlig & Co., Hamburg, Germany, as plaintiff’s source of ownership, as well as the bill of sale from Amerifaet, and other papers, the District of Columbia Department of Vehicles and Traffic issued a certificate of title as to each vehicle showing the plaintiff as the owner.

28. Throughout the entire arrangements between O’Con-nell, Apfelbaum, Bankers Trust Company, and the plaintiff, no one mentioned to any other party anything concerning the payment of or liability for the payment of the manufacturer’s excise tax on the 50 Volkswagens here involved.

29. In its usual operations, in purchasing vehicles from the Ford Motor Company, the plaintiff is, and has been, aware of the fact that the latter company has paid such tax on cars sold to plaintiff and this is indicated on Ford’s invoices to the plaintiff covering such vehicles.

30. Plaintiff has not shown by a preponderance of the evidence that in failing to file an excise tax return, it exercised ordinary business care and prudence.

CONCLUSION OE LAW

Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is not entitled to recover, and the petition is dismissed. 
      
       Section 4061. Imposition of tax.
      (a) AutomoTiaes. — There is hereby imposed upon the following articles (including in each case parts or accessories therefor sold on or in connection therewith or with the sale thereof) sold by the manufacturer, producer, or importer a tax equivalent to the specified percent of the price for which so sold:
      **>#**
      (2) Articles taxable at 10 percent except that on and after July 1, 1959, the rate shall be 7 percent—
      Automobile chassis and bodies other than those taxable under paragraph (1).
      Chassis and bodies for trailers and semitrailers (other than house trailers) suitable for use in connection with passenger automobiles.
      A sale of an automobile, trailer, or semitrailer shall, for the purposes of this paragraph, be considered to be a sale of the chassis and of the body.
     
      
       Section 665,1. Failure to File Tax Return.
      (a) Addition to the tato. — In case of failure to file any return required under authority of subchapter A of chapter 61 (other than part III thereof), of subchapter A of chapter 51 (relating to distilled spirits, wines, and beer), or of subchapter A of chapter 52 (relating to tobacco, cigars, cigarettes, and cigarette papers and tubes), or of subchapter A of chapter 53 (relating to machine guns and certain other firearms), on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate.
     
      
       The bills of sale given by Amerifact to plaintiff after the automobiles were delivered to plaintiff were not a part of the initial arrangements between the parties; these documents were furnished to satisfy the requirements of the District of Columbia with respect to registration and title certificates.
     
      
       See 10 Mertens, Law of Federal Income Taxation. § 55.23 (1958) “The existence of reasonable cause is in the first instance a question of fact for the lower court. What elements must be present to constitute reasonable cause is a question of law. The taxpayer bears the burden of proving reasonable cause.
      * * # * *
      “Mere uninformed and unsupported belief by a taxpayer, no matter how sincere that belief may be, that he is not required to file a tax return, is insufficient to constitute reasonable cause for his failure so to file. * * *”
      
     