
    (356 F. 2d 145)
    JOHN D. LINCOLN v. THE UNITED STATES
    [No. 233-63.
    Decided February 18, 1966]
    
      Roger K. Powell, attorney of record, for plaintiff. E. L. Carpenter, of counsel.
    
      Philip I. Brennan, with whom was Acting Assistant Attorney General Richard M. Roberts, for defendant.
    Before Cowen, Ohief Judge, Laramore, Dureee, Davis and Collins, Judges.
    
   Per Curiam:

This case was referred pursuant to Rule 57(a) to Trial Commissioner Robert K. McConnaughey, with directions to make findings of fact and recommendation for conclusions of law. The commissioner has done so in an opinion and report filed on October 8, 1965. Plaintiff has failed to file exceptions and brief and the time for so doing pursuant to the Pules of the court has expired. On November 26, 1965, defendant filed a motion pursuant to Pule 63 that the court dismiss plaintiff’s petition and adopt the commissioner’s report based upon plaintiff’s failure to file exceptions and brief or a statement of election authorized by Pule 62. Since the court agrees with the commissioner’s findings, his opinion, and his recommended conclusion of law, as hereinafter set forth, it hereby adopts the same as the basis for its judgment in this case. Defendant’s motion to dismiss is granted and plaintiff’s petition is dismissed.

Opinion op Commissioner.

This is a suit to recover, with interest, $40,376.38, paid by the plaintiff as income tax with respect to transactions that occurred in 1946, in the course of liquidation of a Virginia corporation, called Virginia-Lincoln Corporation.

The tax the plaintiff seeks to recover was based on an amount equal to a balance which, in 1946, appeared on the books of Virginia-Lincoln as an amount due from the plaintiff to the corporation. The defendant, in assessing the plaintiff’s income tax for 1946, treated this amount as the measure of part of a dividend received by the plaintiff upon liquidation of Virginia-Lincoln under a plan of liquidation approved November 29, 1945, and assessed a tax on it at capital gain rates which the plaintiff paid and which he now .seeks to recover.

In partial answer to the petition, the defendant has asserted that the plaintiff’s recovexy is barred by a closing agreement allegedly executed by the plaintiff on or about November 8, 1949, signed by the Commissioner of Internal Revenue on January 3, 1950, and approved by the Acting Secretary of the Treasury on February 6, 1950.

The trial was limited to questions pertaining to the execution of the closing agreement.

The plaintiff admits that a form of closing agreement, probaibly signed with his name, was submitted by Mr. Allen H. Gardner, an attorney authorized to represent the plaintiff generally in the controversy concerning taxes arising out of the plan for reorganization of Virginia-Lincoln, and that such a document was signed by the Commissioner, and approved by the Acting Secretary of the Treasury. He claims, however, that he never signed the closing agreement personally, and that, as a consequence, it is not binding upon him and does not preclude him from maintaining the claim asserted in this case for recovery of the amount paid in satisfaction of the tax thereafter determined.

No signed copy of the closing agreement bearing a handwritten signature of the plaintiff’s name is in evidence. One of the witnesses, a retired Internal Revenue agent, who, during the period 1947-50 had examined the income tax returns and other evidence relating to the taxability of the plaintiff, his brother, and the two corporations, testified that, in the past, in the course of his work, he had seen, among the defendant’s records, a copy of the closing agreement bearing a handwritten signature of the plaintiff’s name. Despite a thorough search of the defendant’s records in preparation for the trial, no copy of the signed agreement has been found.

The plaintiff denies ever having, or ever seeing, a copy of the agreement signed with his name, and says that, until recently, he had never been informed that any such document ever existed.

The evidence as a whole leaves no room for doubt, however, that, in the fall of 1949, the plaintiff’s name was signed to duplicate copies of a form of closing agreement by someone, that the signed, duplicate copies were sent to the Commissioner of Internal Revenue, in November of that year, by an attorney authorized to represent the plaintiff generally with respect to his 1946 tax liability, and that, after official approval of the agreement, in February 1950, one of such copies was sent to Mr. Leon T>. BeVille, treasurer of Virginia-Lincoln, and the other was retained among the Internal Revenue records, subject to a direction that it be attached to the original of the plaintiff’s income tax return for 1949. That return was destroyed in February 1964, in accordance with a policy of the Internal Revenue Service for destruction of aging documents. The evidence affords a basis for a reasonable inference that the signed copy of the closing agreement was destroyed at the same time, although the record contains no positive proof of this.

The unavailability of a signed copy of the agreement precludes comparison of the signature on the document with known examples of the plaintiff’s handwriting or of the handwriting of other persons who might have signed his name to it.

The evidence does, however, show that a closing agreement, signed with the plaintiff’s name, was duly approved in February 1950, and does not wholly dispel the possibility that the plaintiff may have signed the closing agreement that was approved.

The plaintiff’s recollection of details concerning arrangements carried out in 1949 and 1950 with respect to the liquidation of Virginia-Lincoln was understandably imprecise, and his mere failure to recollect signing the closing agreement is less than positive proof that he did not.

The plaintiff’s specific denial that he signed the agreement was not based on a definite recollection of a specific, deliberate refusal of any identified opportunity to do so, but upon a reasoned conclusion that he would not have signed any such agreement because of a belief that, if he had, he would have been precluded, contrary to his wishes at the time, from continuing the manufacturing business he was Chen carrying on at the Lincoln Industries- plant. For reasons elaborated hereafter, it is clear that, at the time the plaintiff’s name was signed to the closing agreement, discontinuance of the manufacturing operation was neither an apparently certain, nor an apparently probable consequence of his signing the agreement. On the contrary, it had been quite clear, since months before the time the agreement was signed, that continuance of the manufacturing operation was an integral part of the plan of which the closing agreement was also a part.

As events transpired, the agreement was signed with the plaintiff’s name, by someone, and was approved, and taxes were assessed and paid in accordance with its provisions just as if he had signed, and yet, the manufacturing operation continued without any consequent impediment until it was terminated, for quite different reasons, in 1954, 5 years later, and, according to the plaintiff, he never knew there was such an agreement.

. In these circumstances, on the evidence in this record, the plaintiff’s denial that he signed the agreement may not properly be regarded as overcoming the presumption, established by section 3809 (b) of the Internal Kevenue Code of 1939, as amended, that his signature was genuine.

Moreover, the agreement must be regarded as binding on the plaintiff, even if he did not personally sign it, as an agreement made pursuant to authority from the plaintiff, established, maintained, and confirmed by his consistent, previous practice, over a period of years, of having others sign, for him, his income tax returns, and any other papers that were necessary in connection with his personal income taxes.

The reasons for these conclusions derive from circumstances attending the negotiation of the closing agreement, the nature and extent of the plaintiff’s participation in the activities of Virginia-Lincoln and Lincoln Industries, and Lis professed, continuous disregard, between 1943 and 1954, of all matters concerned with the determination of his personal income tax liabilities.

During a period beginning in 1943 and extending at least until March 1, 1950, the plaintiff was vice president and a director of Virginia-Lincoln, and of Lincoln Industries, Inc., which originally was a wholly owned subsidiary of Virginia-Lincoln. Personally, and as a trustee for his two daughters, he owned half the stock of Virginia-Lincoln. His brother, C. C. Lincoln, Jr., was president and a director of the two corporations and owned the other half of the Virginia-Lincoln stock. The plaintiff testified that he bought out his brother’s interest in March of 1950, after the events with which this case is primarily concerned.

The plaintiff devoted himself mainly to production aspects of the manufacturing business carried on through the two corporations. He says he paid relatively little personal attention, if any, to adjustments that may have been proposed, or made, in the corporate structure of the enterprise, to its relations, or those of its stockholders, with the Bureau of Internal Revenue, or to any other phases of the business not directly concerned with the manufacture of its products.

His testimony indicates, however, that he had definite opinions in opposition to any rearrangement of the corporate relationships that would have terminated the manufacturing operation, and that he had considerable knowledge of arrangements made for financing the continuance of manufacturing after the spring of 1946, when one of the plants was sold — including a plan for utilization of funds which he and his brother had invested in marketable securities, and had agreed to use, as needed, as a capital pool for financing manufacturing, through Lincoln Industries.

According to the plaintiff, during the whole period of his participation in the Virginia-Lincoln enterprise, until 1954, he followed a policy of total inadvertence to all matters concerned with his-personal tax liabilities. He testified that he did not believe he ever signed a tax return himself before 1954. Instead, all his personal tax returns were prepared, and signed for him, either by BeVille, the treasurer of Virginia-Lincoln, or by a Mr. Kimble, an accountant in Roanoke, Virginia, who also did work for the Lincoln enterprises.

According to the plaintiff, although he never specifically-authorized anyone to execute a closing agreement for him, these, gentlemen had authority to act for him with respect to his personal income taxes and to execute such documents concerning them as were necessary.

Moreover, it is clear from the record that Mr. Gardner had general authority to. represent the plaintiff with respect to the tax liabilities asserted against him as a result of the proposed liquidation of Virginia-Lincoln, and was specifically employed by either BeVille or Kimble to conduct negotiations on behalf of the plaintiff' with respect to the basis on which such liabilities should be determined.

Beginning in 1947, Mr. Gardner, acting pursuant to that authority, conducted such negotiations to an ostensibly successful conclusion, in February-1950, when the Acting Secretary of the Treasury approved a closing, agreement that Mr. Gardner had. submitted in the plaintiff’s name, along with three other similar agreements he had submitted at the same time — one on behalf of the plaintiff’s brother, and two-on behalf of the plaintiff as trustee for his children.

A number of events, leading eventually to the approval' of the- closing agreement, are significant to a determination-of its validity.

Before the Second World War, the Lincoln enterprise-manufactured furniture. It had two plants — one at Marion,. Virginia (directly- owned by Virginia-Lincoln), and one at Damascus, Virginia (owned by Virginia-Lincoln’s wholly owned subsidiary, Lincoln Industries, Inc.).

In 1942 or 1943, Virginia-Lincoln’s plant at Marion-burned. Liquidation of the enterprise was considered at that time, but, instead, partly as a result of urging by officials of ‘ the Army and Navy, a new plant was built at Marion, and’ articles needed for the war were produced there by Virginia-Lincoln until the end of hostilities in 1945. •

The plaintiff’s recollection of what happened thereafter, as-expressed in his testimony, is not precisely revealing con-corning specific steps tafeen between November 1945 and 1954 with respect to the liquidation of Virginia-Lincoln.

■' However, a request for a ruling, dated June 20,1947, and a brief, dated December 20,1949, submitted to the Commissioner of Internal Revenue by Mr. Gardner, on behalf of the plaintiff, among others, describe the ensuing events. The record affords no reason for doubting the truth of the representations made in those documents. The facts represented are summarized immediately hereafter.

A plan for liquidation of Virginia-Lincoln, whereby it would distribute its assets in kind to its stockholders, was approved in November 1945. Pursuant to that plan, Virginia-Lincoln purchased its preferred stock, and the certificates for its common stock were delivered to an escrow agent for cancellation upon completion of the liquidation.

In March 1946, the Virginia Corporation Commission issued a certificate of dissolution of Virginia-Lincoln.

Immediately thereafter, proportionate, undivided interests in the dissolved corporation’s real estate, machinery, and equipment were conveyed to its stockholders and, in May of that year, some of these physical assets, including the Marion plant, were sold to the Brunswick-Balke-Oollender Corporation.

It is the tax on an amount which then appeared on Virginia-Lincoln’s books as due the corporation from the plaintiff, and which the defendant treated as part of the plaintiff’s share of the proceeds of this partial liquidation of Virginia-Lincoln, that is in controversy in this suit.

While the events, just described, affecting Virginia-Lincoln, were occurring, manufacturing operations continued, under the plaintiff’s direction, in the Damascus plant owned by Lincoln Industries.

At about the time the certificate of dissolution of Virginia-Lincoln was issued, and some of its assets were sold, a decision was reached to improve and expand Lincoln Industries’ Damascus plant. The development of this program apparently gave rise to a previously unanticipated need for capital, and to second thoughts about prompt completion of the liquidation of Virginia-Lincoln by distributing its remaining assets in kind to its stockholders. Consideration was given, to modification of the plan to provide for a reorganization, whereby Virginia-Lincoln’s remaining assets would be transferred to Lincoln Industries, and Lincoln Industries would issue capital stock to Virginia-Lincoln and assume the liabilities of Virginia-Lincoln, which would then distribute the Virginia-Lincoln stock to its stockholders.

There had been a difference of opinion between the plaintiff, who testified that he opposed “liquidation” because he wanted to continue active manufacturing operations, and his brother, who apparently wanted to liquidate the enterprise entirely and cease manufacturing. The upshot of this controversy was that manufacturing operations continued under the plaintiff’s direction at the Damascus plant, through Lincoln Industries, until sometime in 1954, when other difficulties, not related to the issues here, led to a sale of the Damascus plant. Before that occurred, the plaintiff had; acquired his brother’s interest.

The plaintiff says that, throughout, the time when the plans for the liquidation of Virginia-Lincoln were being made and partially carried out, and Steps were being taken to establish the basis for taxation of the. resulting distributions, he was devoting- most of his time and attention to production at the Damascus plant. Although he was a director of both corporations and professed to be opposed to liquidation of Virginia-Lincoln primarily because he had sons coming on at that time and wanted to run a business for them, he says he paid little, if any, attention to what was being done about the liquidation.

It is apparent from this record, however, that, whether he paid attention or not, the partial liquidation of Virginia-Lincoln that had occurred in 1946 did not substantially impede attainment of his objective of continuing with the manufacturing business. Production continued at the Damascus plant of Lincoln Industries, without interruption, until that operation ran into other difficulties in 1954.

It is also apparent from this record that the prospect, explicit in the closing agreement, that proceeds of the liquidation of Virginia-Lincoln would be treated as.amounts received- in the complete cancellation and liquidation of Virginia-Lincoln’s stock, and that such proceeds would be taxed as capital gains or losses, could not reasonably have been regarded by the plaintiff, in the fall of 1949, as a substantial threat to the continuance of Virginia-Lincoln’s manufacturing operations.

In a letter, dated March 14, 1949, to the Commissioner of Internal Kevenue, amending a previous request for a ruling, Gardner stated that it was then proposed to complete the liquidation of Virginia-Lincoln in accordance with the original plan, by distributing its assets in kind to its stockholders- and canceling its stock, and that included among the assets-to be distributed would be Virginia-Lincoln’s stock in its subsidiary, Lincoln Industries, “which latter corporation will continue its present business.” [Emphasis supplied.]

It is obvious from this representation that the proposal that Lincoln Industries would continue its manufacturing-business after liquidation of Virginia-Lincoln was a settled part of the plan as early as March 14,1949. If the plaintiff' paid any attention whatever to the one aspect of the program which, according to his testimony, was his primary, if not his only, concern with the liquidation plans, he must have known this at the time when the closing agreement forme were signed, in the fall of 1949.

In the light of these facts, the record affords no substantial support for the plaintiff’s professed recollection that, in the-fall of 1949, a threat of termination of the manufacturing-operations existed as a real or apparent reason for his refraining from execution of the proposed closing agreement..

The evidence similarly affords no basis for concluding that any apparent threat to continuance of the manufacturing-business existed in the fall of 1949 as a reason for the plaintiff to object to execution of the closing agreement on his behalf by others, or to restrict BeVille’s or Kimble’s previously unlimited authority to do whatever was necessary concerning-his personal taxes by denying them authority to execute the proposed closing agreement. Moreover, there is no evidence-that he took any action in 1949 that could conceivably be-construed as limiting their authority, either expressly or by-implication, in this or any other way.

Nor does the evidence establish that BeVille or Kimble-had any reason spontaneously to regard the plaintiff’s desire-to continue manufacturing operations as imposing, by implication, any limitation on their previous general authority to handle all of his tax matters without requiring his personal signature on any necessary papers. By the time the closing agreements were signed, the program for liquidation of Virginia-Lincoln notoriously contemplated continuance of manufacturing by Lincoln Industries, and execution of the closing agreement was wholly consistent with the plaintiff’s •desire that the manufacturing enterprise should continue.

In summary, there is no evidence that the plaintiff ever took any action of any kind, before the signing and approval •of the closing agreement, that would have given BeVille or Kimble, or anyone with whom they might have dealt previously with respect to the plaintiff’s taxes, any reason to believe that they no longer had the comprehensive authority to act for him in matters affecting his personal taxes (including authority to sign any necessary papers) that one or the other of them had 'been exercising for a number of years.

The plaintiff says that, throughout the period when alternative methods of disposing of Virginia-Lincoln were under consideration, he continued, as he had previously, to remain altogether aloof from personal participation in any actions concerning his personal taxes. He says that, through-nut that period, he neither signed his own tax returns, nor signed any other papers concerning his personal taxes, but that such matters were all handled for him by BeVille or Kimble, as they had been previously. From this it is apparent that whatever authority BeVille or Kimble, or both of them, had to handle the plaintiff’s personal tax affairs— and their authority appears to have been complete, though informal — that authority continued, unchanged, throughout the period when Gardner was negotiating the closing agreements.

In his testimony the plaintiff said he had no recollection •of signing the closing agreement and specifically denied that he did so. There is no affirmative proof that he did. Yet the record plainly shows that a form of the agreement, signed with his name, was submitted to the Commissioner of Internal Revenue in November 1949, and was approved by the Acting Secretary of the Treasury on February 6,1950.

TI10 record also plainly shows that, on September 27,1949, Gardner sent the forms of the agreements to BeVille, with his recommendation that they be executed, that on November 23, 1949, BeVille sent them back, purportedly executed in duplicate, and that 'by November 29,1949, Gardner sent them to the Commissioner of Internal Revenue for his signature and for ultimate approval by the Acting Secretary of the Treasury.

The procedure followed at Internal Revenue, in processing requests for approval of closing agreements, required that two copies of the agreement bear the signature of the person proposing to enter such an agreement. The fact that the agreement submitted on behalf of the plaintiff survived this processing, and was approved, affords an ample basis for concluding that two of the copies submitted were signed with the plaintiff’s name.

Even if the plaintiff’s denial that he signed the agreements-be accepted as more than a mere failure to recollect whether he did or not, the sequence of events that led to the submission and approval of the agreements substantially precludes;

’ any reasonable inference that the signature of his name on the forms of agreement was unauthorized.

BeVille, and Kimble, had full authority to sign papers-necessary for determination of the plaintiff’s income tax liabilities. The record affords no basis for suspicion that the forms of agreement which BeVille returned to Gardner in the fall of 1949, for submission to the Commissioner, were not signed, either by the plaintiff himself, or by BeVille or Kimble, under their general authority to sign papers relating to the plaintiff’s taxes, or by someone manually executing their authority pursuant to their direction. The procedure followed precludes any reasonable possibility that the forms BeVille sent to Gardner had been signed by some irresponsible person who lacked actual authority to affix the signature of the plaintiff’s name.

It is an almost unavoidable inference from this record that, if the plaintiff did not sign the closing agreement himself, it was signed pursuant to the authority which admittedly he had accorded to BeVille or Kimble, or both of .tbem, for years, to sign his name to any necessary papers ¡concerned with his personal taxes.

■ Moreover, if there should be 'any doubt of their authority, the plaintiff, having acquiesced for years in their handling ¡of all matters concerning his personal taxes, may not now •.assert that, in signing the plaintiff’s name to the closing ¡agreement, or having the plaintiff’s name signed to it, Be-Ville exceeded the authority, apparent to him, by reasonable implication' from the plaintiff’s extended acquiescence in his. previous performance of comparable functions on the [plaintiff’s behalf.

■ This was 'actual authority which, even if it was never expressly- given, had derived by implication from a continuous •course of conduct calculated to establish and verify, to anyone concerned, that there was an understanding between BeVille and the plaintiff that documents relating to the ¡plaintiff’s taxes, signed in the'plaintiff’s name by BeVille ■or-Kimble, or at their direetiorq would be binding on the plaintiff.

If, -as the plaintiff testified, he never personally signed a tax return- before 1954, nor personally executed any- other papers concerned with his taxes, the defendant’s representatives had neither any reason for questioning, nor any means for verifying, whether the signature on the dosing agreement forms was in the plaintiff’s-hand. In those circumstances, they were entitled to rely • on the statutory presumption that the signature was his.

The evidence does not establish, convincingly, that the .signature on the closing agreements was not either the plaintiff’s own, or a signature affixed pursuant to authority established by his longstanding delegation to BeVille and Kimble of responsibility for handling all matters affecting his personal taxes.

The evidence as a whole requires the conclusion that the closing agreement is binding on the plaintiff. As a consequence, determinations made in. accordance with it may not be modified in this proceeding.

Findings of Fact

1. Between 1943 and March. 1, 1950, the plaintiff, John D. Lincoln, was vice president and a director of a Virginia corporation, called Virginia-Lincoln Corporation, and’ of its wholly owned subsidiary,’ Lincoln Industries, Inc. Personally, and as trustee for his two daughters, .he owned half the stock of Virginia-Lincoln.

2. During that same period, the plaintiff’s brother, C. C. Lincoln, Jr., was president and.a director of both, corporations and owned the other half of the stock of Virginia-Lincoln.

3. On March 1, 1950, the plaintiff acquired his brother’s interest, and thereafter continued’ the business as sole owner of all the stock until 1954. ’

4.. Before March 1,1950, the plaintiff devoted his attention and energies principally to the-manufacturing operations of the enterprise and had little to do with other phases of the •business, which were managed under his brother’s direction.

5. During the period’ preceding March 1, 1950, Leon D. ■ BeVille was treasurer of Virginia-Lincoln.

6. The plaintiff , has no recollection of ever personally signing any income tax returns, or any other papers concerned ..with determination or adjustment of his income taxes before 1954.

7. During the 1940’s, and at least until May 29, 1950, Be-Ville, and Leslie Kimble (an accountant, of Boanoke, Virginia), had general authority from the plaintiff to prepare and sign his income tax returns-, to negotiate all adjustments , in his income taxes, to sign, for him, all papers relating to .his income taxes, and to take any action..in regard to his taxes which they considered appropriate and advantageous to his interest.

8. Before May 29,1950, the plaintiff never took any action which expressly, or by any reasonable implication, limited, in any way, BeVille’s or Kimble’s authority described in finding 7. -

9. On May 29,1950, the plaintiff expressly appointed Kim-ble, in writing, as—

* * * his true and lawful agent, to appear for him and represent him before the Treasury Department or any other Department of the United States Government in connection with all Federal income tax matters for the years 1944, 1945, 1946 and 1947, now pending, or which may be pending prior to the revocation hereof.
The said representative is vested with full power of substitution and revocation. The execution of this instrument hereby ratifies and confirms all that said representative shall lawfully do or cause to be done by virtue hereof.
This power supersedes all powers previously granted by said person authorizing any person or persons to represent him in connection with any and all of the matters above-mentioned, and all such previous powers are hereby revoked and canceled.

■10. Before May 29, 1950, the plaintiff never took any action which expressly authorized BeVille or Kimble, or any other person, to sign his name to any specifically identified closing agreement, or to any other specifically identified, individual document relating to his taxes, or which expressly, or by any reasonable implication, denied to BeVille or Kimble authority to sign his name to any document relating to his taxes. Instead, at all times before May 29,1950, the plaintiff relied upon BeVille and Kimble to handle all matters relating to his taxes, under their general authority described in finding 7, and, under that authority, to sign all papers necessary or appropriate to the determination or adjustment of his taxes.

11. Before World War II, the Lincoln’s enterprise in Virginia manufactured furniture. It had two plants — one at Marion, Virginia (directly owned by Virginia-Lincoln), and one at Damascus, Virginia (owned by Lincoln Industries, Inc.).

12. In 1942 or 1943, Virginia-Lincoln’s Marion plant burned. Liquidation of the enterprise was then given consideration. Instead, partly as a result of urging by officials of the Army and Navy, a new plant was built at Marion, and articles needed for the war were produced there until the end of hostilities in 1945.

13. (a) In November 1945, after the end of the war, a plan was approved for liquidation of Virginia-Lincoln, whereby it would distribute its assets in kind to its stockholders. When the plan was adopted, it was expected that the liquidation would be completed by July 1, 1946.

(b) Pursuant to that plan, Virginia-Lincoln promptly redeemed its preferred stock, and the certificates for its common stock were delivered to an escrow agent for cancellation upon completion of the liquidation.

14. In March 1946, the Virginia Corporation Commission issued a certificate of dissolution of Virginia-Lincoln.

15. Immediately thereafter, proportionate, individual interests in the dissolved corporation’s real estate, machinery, and equipment were transferred to its stockholders, and, in May of 1946, some of these physical assets, including the Marion plant, were sold to the Brunswick-Balke-Collender Corporation.

■16. During the spring of 1946, it was decided to expand Lincoln Industries’ plant. The need for capital for this purpose led to a proposal, made shortly after the distributions to stockholders described in finding 15, to modify the original plan of liquidation to provide that, instead of distributing its remaining assets in kind to its stockholders, Virginia-Lincoln would transfer them to Lincoln Industries, which would issue capital stock to Virginia-Lincoln and assume Virginia-Lincoln’s liabilities, whereupon Virginia-Lincoln would distribute the Lincoln Industries stock to its stockholders to complete the liquidation through what it was hoped would be treated as a tax-free reorganization.

17. The plaintiff testified that he paid relatively little attention to details of the plans for liquidation of Virginia-Lincoln and was not currently informed concerning them.

18. (a) The plaintiff testified that he was opposed to “liquidation” of Virginia-Lincoln because he had boys coming on and wanted to continue running a business for them, whereas his brother wanted to liquidate the enterprise entirely.

(b) Despite the plaintiff’s statements that he paid little or no attention to details of the plans for liquidation of Virginia-Lincoln, it is apparent from his testimony as a whole that he took an active, and aggressive, part in discussions with his brother concerning arrangements for financing continued manufacturing operations and persuaded his brother to agree to the utilization of substantial funds they had invested in marketable securities as a capital pool for that purpose.

19. The plaintiff’s professed opposition to “liquidation” of' Virginia-Lincoln appears, from the evidence as a whole, to> have been opposition only to any arrangement that appeared likely to result in cessation of the manufacturing business* which he wished to continue, and was not concerned with details of the proposals for liquidation of Virginia-Lincoln,, except to such extent as he believed they created a threat to continuance of successful manufacturing operations under-his direction.

20. It is a reasonable inference from the evidence that the proposed modifications of the original plan for liquidation of Virginia-Lincoln, described in finding 16, resulted, at least in part, from the plaintiff’s opposition to any form of liquidation that he believed might result in termination of the manufacturing business he was then conducting through Lincoln Industries.

21. Before steps were taken to carry out the proposed modifications in the plan of liquidation, Mr. Allen H. Gardner,, an attorney in Washington, D.C., was employed by BeVille, on behalf of the plaintiff, his brother, and the two corporations, to represent them in procuring a ruling from the Commissioner of Internal Revenue concerning the taxable effect of the arrangements proposed for liquidation of Virginia-Lincoln. The plaintiff admits that Gardner was employed by the plaintiff to represent him generally in this matter.

22. Proceeding in accordance with the employment described in finding 21, Gardner, on June 20, 1947, requested a ruling and the execution of a closing agreement fixing the taxable effect of the transaction, if carried out according to the modified plan described in finding 16. In that request,. Mr. Gardner said, in part—

H» »!» •{* *{»
If the ruling and final closing agreements establish that the proposed reorganization and other transactions: specified shall have the tas consequences set forth below,, the liquidation plan will be modified to incorporate the reorganization proposal. If, however, such a ruling and; final closing agreements cannot be made, the liquidation will be completed in accordance with the original plan.
It is desired that the ruling shall hold, and that the' agreements shall establish, that the reorganization and' other transactions mentioned shall have the following-specific tax consequences:
(1) That the assets heretofore distributed by the-Virginia-Lincoln Corporation' to its stockholders-shall be deemed to have been “amounts distributed in partial liquidation of a corporation” within the-meaning of Secton llo of the Code if
(a) the liquidation of the Corporation is completed by means of the proposed reorganization mentioned below, in lieu of the Corporation’s distribution in kind of its remaining assets to> its stockholders, or, in case the ruling and closing agreements cannot establish this proposition under the sole assumption set forth m this sub-paragraph (a), . '
(b) there is forthwith cancelled the same proportionate share of the Corporation’s outstanding common stock now held in escrow which the value of the assets heretofore distributed bore to the total value of the corporate assets, and the liquidation is thereupon completed aa specified in subparagraph (a) above.
(2) That there is no taxable income to the stockholders of the Virginia-Lincoln Corporation upon their exchange of their common stock in that corporation for common stock in Lincoln Industries,. Inc., in the reorganization hereinafter specified.
(3) That there is no taxable income to the Virginia-Lincoln Corporation upon the transfer of its assets, including the common stock which it now holds in Lincoln Industries, Inc., to Lincoln Industries, Inc., in consideration of the issuance by Lincoln Industries, Inc., of its common stock to Virginia-Lincoln Corporation for distribution to the stockholders of Virginia-Lincoln Corporation and. the assumption by Lincoln Industries, Inc., of the liabilities of Virginia-Lincoln Corporation.
$ # $ * ‡ ‡

23. Thereafter, Gardner’s contentions in support of the request were elaborated in a brief he submitted December 20, 1948, to the Commissioner of Internal Eevenue.

24. Following additional correspondence and conferences between Gardner and representatives of the Commissioner of Internal Eevenue, Gardner, by a letter dated March 14,

1949, submitted to the Commissioner, on behalf of the plaintiff and the other persons named at the beginning of the letter, the following amended request for a ruling and execution of a closing agreement:

Ee: Virginia-Lincoln Corporation, Marion, Virginia
Lincoln Industries, Inc., Damascus, Virginia
C. C. Lincoln, Jr., Marion, Virginia
John D. Lincoln, Marion, Virginia_
John D. Lincoln, as Trustee for Mildred Boyd Lincoln, Marion, Virginia
John D. Lincoln, as Trustee for Joan Dickey Lincoln, Marion, Virginia
Amended Eequest for Euling and Closing Agreements
Sir:
This is an amended request for a ruling, and for the execution of final closing agreements under Section 8760 of the Code as bo specific matters, determining that the taxable effect of certain proposed distributions hereinafter specified shall be set forth below.
This request is an amendment bo the request of June 20, 1947. The amendment is made in the light of your letter of February 4, 1949, symbols IT :E :B :Sec-FBE, and of a conference held today with Mr. Frank T. Eddingfield, Technical Advisor to the Deputy Commissioner, and Mrs. F. B. Eapp, auditor in Audit Eeview Division B. The facts set forth in the earlier request and in the exhibits and other papers appertaining thereto are, so far as presently material, made a part hereof by reference.
It is now proposed to complete the liquidation of the Virginia-Lincoln Corporation in accordance with the original plan adopted on November 29, 1945, instead of through the merger described in the request of June 20, 1947. Under this plan, the Virginia-Lincoln Corporation will make a pro rata distribution in kind of all its remaining assets to its stockholders, and the common stock of the corporation will thereupon be cancelled. Included in the assets to be liquidated will be the stock held by the Virginia-Lincoln Corporation in Lincoln Industries, Inc., a subsidiary corporation, which latter corporation will continue its present business.
It is desired that the ruling shall hold, and that the agreements shall establish, that, if the remaining assets are distributed in accordance with the above-mentioned plan, the distributions made in 1946 and to 'be made under the liquidation plan shall be deemed to have been “amounts distributed m complete liquidation of a corporation” within the meaning of Section 115 (c) of the Code, and, therefore, subject only to the tax on capital gains.

25. On September 20, 1949, the Acting Commissioner of Internal Bevenue replied to the amended request described in finding 24, reviewed the representations made as the basis for the amended request, and concluded as follows:

*******
Based solely on the facts and circumstances set forth in information furnished, this office will recommend the approval of closing agreements on the following basis:
All of the distributions subsequent to the date, November 29, 1945, of the formal adoption of the plan of liquidation by the board of directors constitute amounts distributed in the complete liquidation of the corporation within the meaning of Section 115 (c) of the Internal Bevenue Code. The gain or loss to the shareholders, represented by the difference between the adjusted basis to them of the shares of stock surrendered and the cash plus the fair market value of the other properties received therefor in each case constituted, or will constitute, capital gain or loss within the meaning of Section 117 (a) of the Internal Bevenue Code.
No opinion is expressed as to what the amounts were which, for Federal income tax purposes were deemed to have been distributed in liquidation, more particularly as to whether a certain sale of assets to Brunswick-Balke-Collender Company is to be ascribed to the corporation or to the shareholders.
The necessary closing agreements have been prepared, in duplicate, and are enclosed for execution by the proper taxpayers. In pursuance of the Bureau’s policy with respect to such agreements, each contains a stipulation to the effect that any subsequent change or modification of the applicable statutes will render the agreement ineffective to the extent that it is dependent upon such statutes. The closing agreements, which are to 'be signed by trustees, should be accompanied by an attested copy of the court order or the trust instrument vesting such person or persons with authority so to act, together with an affidavit to the effect that the authority of the trustee remains in full force and effect.
The closing agreements, executed in duplicate, should be returned to this office, accompanied by the documentary evidence referred to above, for the attention of IT:E:B:Sec-FBE.
After the agreements are signed by the Commissioner of Internal Eevenue and approved by the Secretary of the Treasury, the Under Secretary or an Assistant Secretary, the duplicate copies will be forwarded to the respective taxpayers for retention.

26» On September 27, 1949, Gardner sent the proposed closing agreements to BeVille, as treasurer of Virginia-Lincoln, with the following letter:

The Acting Commissioner of Internal Eevenue, by letter dated September 20, 1949, has agreed to recommend the approval of closing agreements as requested by us, and has sent us the proposed agreements, in duplicate, for execution. We enclose these agreement forms to each of which is attached a copy of the letter of September 20,1949.
The proposed agreements seem to be in accordance with the request contained in our letter to the Commissioner of March 14, 1949, and should, we think, be executed. If you will have the several forms signed as indicated, and will return them to us, we shall put them through for completion by the Government. You will note particularly the request in the last paragraph on page 2 of the letter of September 20 that the closing agreements for the trusts should be accompanied by an attested copy of the Deed of Trust vesting the trustee with authority so to act, together with an affidavit to the effect that the trustee’s authority remains in full force and effect.

27. On November 23,1949, BeVille sent the following letter to Gardner:

I hope the delay in getting the enclosed papers back to you has not inconvenienced you greatly.
The writer got stuck on a Federal Jury recently and naturally got terribly behind.
I hope you will find the enclosed affidavit to meet with your approval, but if you think that the form should be changed any, you might prepare this and send it to me for execution.
Our Federal agents were back again recently delving into original cost of stock and it could mean that they have a little change of heart in that connection, but did not indicate so, as I was out of town.

28. On November 29, 1949, Gardner sent the executed, duplicate closing agreement forms to the Commissioner, and wrote BeVille as follows:

This will acknowledge receipt of your letter of November 23 enclosing the agreement forms executed in duplicate and copies of the trust instrument and an affidavit showing that Mr. John D. Lincoln’s authority as trustee is still in full force and effect. We have filed these with the Bureau of Internal Revenue and hope that the Commissioner of Internal Revenue will affix his signature promptly.
The Revenue Agents will probably claim that the sale to Brunswick-Balke-Collender Company was made by the corporation rather than by the shareholders, but we believe that the decision to liquidate under the present plan will strengthen our claim that the shareholders made the sale.

29. Between 1948 and 1951, Miss Alice Hogan was Chief of the Final Closing Agreement Branch of the Internal Revenue Service. In that capacity, she processed or supervised the processing of all closing agreements between taxpayers and the United States. The processing entailed, among other things, an examination of the closing agreements to determine whether they were properly signed.

30. According to the practice then in effect, when a proposed closing agreement was returned to the Commissioner of Internal Revenue for his signature and approval by the Secretary, the signed original and duplicate forms of the agreement, together with the ruling file, were septeto Miss Hogan by a transmittal memorandum which contained a list of all closing agreements transferred therewith. Miss Hogan examined the agreements to see that they were properly executed, and then prepared a schedule, on a form known as form 866B, which, is phrased as a letter to the Secretary of the Treasury from the Commissioner of Internal Revenue, requesting that the Secretary approve the closing agreement. The contents of the proposed agreement were fully set forth in the schedule.

31. The schedule 866B, together with the two signed copies of each closing agreement and the ruling file, were then sent to the Commissioner of Internal Revenue, who signed the schedule and each of the closing agreements and thereafter submitted both the schedule and the executed closing agreements to the Secretary of the Treasury for his approval.

32. The Secretary or his delegate noted his approval by affixing his signature in the lower left-hand comer of the schedule 866B.

33. The schedule 866B, the fully executed closing agreements, and the ruling file were then returned to Miss Hogan, who prepared a letter to each taxpayer, or his representative, enclosing the fully executed copy of the closing agreement. In due course, the fully executed, original copy of the closing agreement was sent to the district in which the taxpayer filed his return.

34. On December 1,1949, the Head of Audit Review Division B sent a memorandum, of the kind described in finding 30, to the attention of Miss Alice Hogan, Chief, Final Closing Agreement Subsection, which listed, as transmitted therewith, four proposed closing agreements, identified by the following names: Mr. John D. Lincoln, Marion, Virginia; Mr. C. C. Lincoln, Jr., Marion, Virginia; John D. Lincoln, Trustee for Mildred Boyd Lincoln, Marion, Virginia; John D. Lincoln, Trustee for Joan Dickey Lincoln, Marion, Virginia. The memorandum stated that, after the proposed closing agreements had been approved, and the duplicates sent to the taxpayer, the closing agreements, together with other designated papers, should 'be attached to the 1949 returns of the respective taxpayers.

35. The import of the four names appearing on the transmittal memorandum was that executed closing agreements had been received from each of the four taxpayers or their representatives.

36. Under the procedure then in effect, all closing agreements came across Miss Hogan’s desk. Had any one of the four closing agreements, described in finding 84, not been signed with the name of one of the designated taxpayers, the memorandum, together with all of the four proposed closing agreements, would have been returned to the forwarding office, where a new transmittal memorandum containing only the three names signed to proposed closing agreements would have been prepared and returned to Miss Hogan with the three executed closing agreements.

87. After receipt, in Miss Hogan’s office, of the proposed closing agreements described in finding 84, a schedule on form 866B was prepared, dated January 3,1949, and signed by the Commissioner. That schedule asked the Secretary to approve the Commissioner’s action in entering into closing agreements with John D. Lincoln, C. C. Lincoln, Jr., John D. Lincoln, as trustee for Mildred Boyd Lincoln, and John D. Lincoln, as trustee for Joan Dickey Lincoln. The schedule contained a verbatim recital of the provisions of the proposed closing agreements, which were identical except for the names of the taxpayers, one of which appeared, typed, on the first page of the duplicate copies of each of the four agreements.

88. In Miss Hogan’s 30 years with the Internal Kevenue Service, she had never known of an instance where a taxpayer’s name was listed among the persons whose closing agreements were submitted for approval, on form 866B, without a form of closing agreement, signed with the taxpayer’s name, having been signed also with the Commissioner’s signature. The procedure is designed to provide for a request by the Commissioner for approval by the Secretary of fully executed agreements, and was carefully administered to assure that it accomplished that objective.

39. The schedule described in finding 37, signed by the Commissioner of Internal Bevenue, George J. Schoeneman, was approved, on February 6, 1950, by Thomas J. Lynch, Acting Secretary of the Treasury. Following approval of the Acting Secretary of the Treasury, by his signature on the form 866B, the fully executed closing agreements, the schedule 866B, and the ruling file were sent back to Miss Hogan, who, in the ordinary course of her duties, affixed on each closing agreement a stamp which bore the date on which the Acting Secretary approved the agreement and a schedule number corresponding to the number assigned to the schedule 866B on which the Acting Secretary had placed his signature.

40.Miss Hogan prepared a letter, dated February 9,1950, for the signature of P. H. Sherwood, Head, Clearing Division, to Gardner, which stated:

The closing agreements executed by the following named individuals in accordance with the provisions of section 3760 of the Internal Revenue Code were approved by the Acting Secretary of the Treasury February 6, 1950 and are enclosed herewith for transmittal to the taxpayers.
C. C. Lincoln Jr. Marion, Virginia
John D. Lincoln Marion, Virginia
John D. Lincoln, Trustee for Joan Dickey Lincoln Marion, Virginia
John D. Lincoln, Trustee for Mildred Boyd Lincoln Marion, Virginia

In the lower left-hand corner of this letter, there appears the word “Enclosures.”

41.On February 10, 1950, Gardner wrote the following letter to BeVille:

This morning we have received from the Income Tax Unit the four final agreement forms which were approved by the Acting Secretary of the Treasury on February 6, 1950. These forms are enclosed.
The Virginia-Lincoln Corporation should now proceed to complete the liquidation in accordance with the original plan. If there is no deviation from the plan, the closing agreements will protect the several parties; but if there is a material change, this might make the protective agreements inapplicable. It is accordingly important to follow the plan closely.
When the liquidation has been completed, please inform us, as it may be advisable to file a report of the liquidation with the Bureau of Internal Revenue.

42.Miss Hogan was directed, by the instructions contained in the transmittal memorandum of December 1, 1949, described in finding 34, to associate the executed closing agreements with the 1949 income tax returns of the respective taxpayers upon their approval by the Secretary.

43. Miss Hogan prepared a letter, dated June 12,1950, for the signature of P. H. Sherwood, Head, Clearing Division, to the Internal Revenue Agent in charge, Richmond, Virginia, referring to him the Bureau’s record copy of a final closing 'agreement, identified in the letter as that of taxpayer John D. Lincoln, Marion, Virginia, #12387. The number 12387 is the same as the number that appears on the schedule 866B, which the Acting Secretary of the Treasury had approved on February 6,1950.

44. .On January 26, 1965, the Acting Chief, Taxpayer Service and Accounts Branch, Internal Revenue Service, Richmond, Virginia, executed an affidavit which stated that, in accordance with Internal Revenue Service destruction procedures, the taxpayer’s 1949 return was destroyed on February 20,1964.

45. Under the established procedure of the Internal Rev-nue Service, effective in 1949 and 1950, when a closing agreement concerned more than one taxpayer, a separate but identical closing agreement was prepared for each. Several copies of each agreement were prepared, each having the name of the particular taxpayer typewritten on the first page, but only the original and one copy were executed. The un-executed copies remained in the file of the Internal Revenue Service for various administrative purposes.

46. Miss Hogan identified, as being similar to the retained copies of closing agreements that came to her for processing, an unexecuted copy of a closing agreement (form 906), bearing the typewritten name “John D. Lincoln, Marion, Virginia”, on the first page thereof. The copy she identified had been certified as a copy kept, in the ordinary course of business of the Internal Revenue Service, on file in the Treasury Department.

47. Mr. J. McDonald Johns, former group supervisor of Field Audit, in the Roanoke, Virginia office of the Internal Revenue Service, who, during the period 1947-50, examined the income tax returns and files of the plaintiff and of C. C. Lincoln, Jr., and the corporate returns of the Virginia-Lincoln Corporation and Lincoln Industries, Inc., identified the unexecuted copy of the closing agreement described in finding 46 as identical, except for the absence of signature, with a fully executed copy, bearing the signature “John I). Lincoln,” a signature purporting to be that of the Commissioner of Internal Eevenue, and a stamp indicating approval of the Secretary, which he saw in the course of his work. Johns also identified a fully executed copy of C. C. Lincoln’s closing agreement.

48. The provisions contained in the approved closing agreement signed with the name “John D. Lincoln” were identical to those contained in C. C. Lincoln’s fully executed closing agreement, and included the following provision:

íf» * * * * * *
The amounts received by said taxpayer from Virginia-Lincoln Corporation subsequent to November 29, 1945, the date of the adoption of the plan of liquidation, constitute amounts received in the complete cancellation and redemption of shares of stock of said Virginia-Lincoln Corporation within the meaning of Section 115 (c) of the Internal Eevenue Code: and the gain or loss to said taxpayer, represented by the difference between the adjusted basis of the shares of stock surrendered and the cash plus the fair market value of the other properties received therefor, constituted, or will constitute, capital gain or loss within the meaning of Section 117(a) or the Internal Eevenue Code.
# * * # sfi * *

49. Mr. Johns attributed his clear recollection of having seen a fully executed copy of taxpayer’s closing agreement to the fact that, at the time the closing agreement was executed, he was about to file a revenue agent’s report he had prepared which recommended assessment of a major tax deficiency against the plaintiff, C. C. Lincoln, Jr., and the corporations, on the same issues which were disposed of by the closing agreement.

50. The plaintiff, during his testimony, said he had no recollection of ever signing the closing agreement. In addition he specifically denied that he had ever signed it. The following excerpt from the trial record indicates the basis for his denial:

*******
The Court: Well, frankly,. gentlemen, I would be interested in an answer to this question as to whether Mr. Lincoln is saying he does not remember signing these papers, or whether he’s saying that he absolutely never signed them.
Mr. Powell: I think that’s a fair question, your Honor?
The Witness: Is that a question?
The Court: Yes. Could you answer that question, Mr. Lincoln?
The Witness : I’d say that I did not sign this Final Closing Agreement, and I had a lot of reasons for not doing so, because I did not want to quit, I didn’t-
The Court : Mr. Lincoln, wait — just answer what you remember.
The Witness : Well, I remember nothing about this final closing agreement at all.
The Court : You don’t remember signing any papers on the tax adjustment, arising out of this dispute?
The Witness: Not that I remember. I know this much, by 1949, it certainly would have been crazy for me to already have borrowed $750,000 from the Jefferson Standard to operate a business with that way [sic] if I was going to liquidate and going to quit. Now, that doesn’t make much sense-
*******

5L (a) In view of the plaintiff’s obviously imperfect recollection of details concerning the development of proposals for liquidation of Virginia-Lincoln, his failure to recall ever signing the closing agreement is not persuasive, affirmative proof that he did not sign it.

(b): The plaintiff’s denial that he signed the closing agreement plainly did not reflect a specific recollection, at the time of trial, of any deliberate refusal or failure to sign it, or of any deliberate rejection of any remembered opportunity to do so. He remembered nothing whatever about the closing agreement. It is clear that his denial was based on a reasoned conclusion that he would not have signed any such agreement because of a reconstituted belief that, if he had, he would have been precluded, thereby, from continuing the manufacturing business he was then carrying on at the Lincoln Industries’ plant, and which he wished to continue.

52. (a) The representations made March 14, 1949, in the amended request for a ruling and for execution of a closing agreement, revealed that the plan then proposed for liquidation of Virginia-Lincoln embodied no threat, either real or apparent, against continuance of the manufacturing business, but, on the contrary, affirmatively contemplated that the manufacturing business would continue as a specific objective of the plan.

(b) From this it is clear that, as early as March of 1949, months before the closing agreements were signed in the fall of 1949, it was apparent, to anyone concerned with the enterprise who might care enough to inquire, that the signing of a closing agreement based on the plan of liquidation then proposed would not result in discontinuance of the manufacturing business. Plainly the reason did not exist in 1949, upon which the plaintiff, in 1965, based his reconstituted recollection that he would have been unwilling to sign the closing agreement, and therefore concluded that he did not sign it. The evidence fails to sustain the only ground asserted by the plaintiff as a basis for his specific denial that he signed the agreements.

53. (a) In November 1945, when the liquidation plan was approved, Virginia-Lincoln’s books reflected an account receivable from the plaintiff. OBy June 1, 1946, the amount receivable as shown on the books was increased because of additional advances made by the corporation to the plaintiff.

(b) In June 1946 the plaintiff paid Virginia-Lincoln an amount that exceeded the amount then shown on Virginia-Lincoln’s books as receivable from the plaintiff, and thereafter the books showed a balance due the plaintiff.

54. (a) Eepresentatives of the Commissioner of Internal Revenue, upon auditing the plaintiff’s tax return for 1946, took the position that the amount appearing on Virginia-Lincoln’s books as due from the plaintiff on June 1,1946 (before the payment made by the plaintiff during June of 1946), was the measure of part of the liquidating dividends paid to the plaintiff in 1946, which included also the value of other assets received by the plaintiff as a result of the liquidation of Virginia-Lincoln.

(b) A letter to Kimble, dated June 26,1952, prepared by H. O. Butler, for the signature of Hoke Murray, Internal Revenue Agent in Charge, said:

Reference is made to your letter of June 23,1952 relative to the treatment of certain balances in the accounts of the above-named taxpayers on the books of Virginia-Lincoln Corporation as liquidating dividends in the year 1946.
Transcripts of their personal accounts disclosed that John D. Lincoln and C. C. Lincoln, Jr., were indebted to the corporation in March 1946, at the time of the adoption of the plan of liquidation, in the amounts of $156,363.89 and $329,080.81, respectively. This indebtedness was increased by subsequent withdrawals to the amount of $169,261.91 and $357,200.96, respectively, by June 1946.
In the settlement of the cases it was concluded that the debit balances of $169,261.91 and $357,200.96 in the accounts of John D. Lincoln and C. C. Lincoln, Jr., respectively, constituted liquidating dividends in the year 1946. Since the individuals in June 1946 paid in to the Virginia-Lincoln Corporation the sums of $250,000.00 each, any subsequent withdrawals to the extent of these amounts constitute repayments of advances.
Since appropriate adjustments will be made in the accounts of the individuals, the sums of $169,261.91 and $357j200.96 would not again be treated as dividends in the liquidation of the corporation.

(c) Mr. Johns, who is identified in finding 47, was told by H. O. Butler, who drafted the letter quoted in finding 54(b), and by Kimble, that the word “settlement,” in the third paragraph, referred to the closing agreements executed by the plaintiff and his brother, C. C. Lincoln, Jr.

55. (a) The Commissioner asserted a deficiency in the plaintiff’s income taxes for 1946, of which, the plaintiff says, somewhat more than $42,000 was attributable to assessment of tax on the amount appearing as due Virginia-Lincoln from the plaintiff, on Virginia-Lincoln’s books, on June 1, 1946, as a liquidating dividend paid in 1946, taxable under the closing agreements as a capital gain.

(b) Thereafter certain amounts were paid or credited to the tax liability asserted against the plaintiff for 1946 and, subsequently, the plaintiff filed a claim for refund of income taxes paid for 1946 of which he claims $40,376.38 represents additional taxes paid as a result of “the liquidating dividend adjustment.”

(c) The Commissioner took no action on the plaintiff’s claim for refund and the plaintiff filed this suit.

56. The evidence establishes that the closing agreement was signed with the plaintiff’s name, on or before November 23, 1949; was signed with the name of the Commissioner of Internal Revenue January 3,1950, and was approved by the Acting Secretary of the Treasury February 6,1950.

57. The evidence does not overcome the statutory presumption that the plaintiff’s name, signed to the closing agreement, was actually signed by the plaintiff.

68. The evidence establishes that, if the closing agreement was not actually signed by the plaintiff, it was signed on his behalf by or under the direction of a person authorized by the plaintiff to sign his name to all necessary papers concerned with determination of his income tax liabilities.

CONCLUSION OF 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 the closing agreement is binding on the plaintiff, that determinations made in accordance with it may not be modified in this proceeding, and that the petition should be and is hereby dismissed. 
      
      
         The test of the alleged closing agreement provides, in part:
      Tie amounts received by said taxpayer from Virginia-Lincoln Corporation subsequent to November 29, 1945, the date of the adoption of the plan of liquidation, constitute amounts received in the complete cancellation and redemption of shares of stock of said Virginia-Lincoln Corporation within the meaning of Section 115(c) of the Internal Revenue Code; and the gain or loss to said taxpayer, represented by the difference between the .adjusted basis of the shares of stock surrendered and the cash plus the fair market value of the other properties received therefor, constituted, or will constitute, capital gain or loss within the meaning of Section 117 (a) of the Internal Revenue Code.
     
      
       26 U.S.C. (I.R.C. 1939), § 3760 (1902 cd.) provides:
      § 3760. CLOSING AGREEMENTS—
      (a) Authorisation. — The Commissioner * * * is authorized to enter Into an agreement in writing with any person relating to the liability of such person (or of the person or estate for whom he acts) in respect of any internal revenue tax for any taxable period.
      (b) Finality. — If such agreement is approved by the Secretary, the under Secretary, or an Assistant Secretary, within such time as may be stated in such agreement, or later agreed to, such agreement shall be final and conclusive, and, except upon a showing of fraud or malfeasance, or misrepresentation of a material fact—
      (1) The case shall not be reopened as to the matters agreed upon or the agreement modified, by any officer, employee, or agent of the united States, and
      (2) .In any suit, action, or proceeding, such agreement, or any determination, assessment, collection, payment, abatement, refund, or credit made in accordance therewith, shall not be annulled, modified, set aside, or disregarded. [Emphasis supplied.)
      
     
      
      U.S.C. § 3809 (1952 ed.) provides:
      § 3809. VERIFICATION OF RETURNS ; PENALTIES OF PERJURY— *****$*
      (b) Signature Presumed Correct. — Tbe fact that an individual’s name is signed to a return, statement, or other document filed shall be prima facie evidence for all purposes that the return, statement, or other document was actually signed by him.
     
      
       Only the closing agreement submitted in the name of the plaintiff personally is in issue in-this case.
     
      
       The actual authority present here is to be distinguished from apparent -authority which depends upon the reasonable implications of a course of conduct that creates an appearance of authority to persons dealing with an •ostensible agent, even though no actual authority exists. See, e.g., Masuda v. Kawasaki Dockyard Co., 328 F. 2d 662 (2d Cir. 1964); Gilmore v. Royal Indemnity Co., 240 P. 2d 101 (5th Cir. 1956). Cf. Robinson v. Comm’r of Internal Revenue, 100 F. 2d 847 (6th Cir. 1939), which deals with equitable estoppel based on a course of dealing with the Bureau of Internal Revenue.
      There is no evidence here that any of the individual representatives of the •defendant who processed his tax documents had ever been informed that the signature of his name on any of such documents was not in his own handwriting. Accordingly, they do not appear to have had any occasion, or op--portunlty, to rely upon the apparent authority of BeVille or Kimblé to sign the plaintiff’s name. Whatever reliance they may have had occasion to place •on appearances rests on the statutory presumption that the plaintiff’s name, •signed to tax documents, was actually signed by him. 26 Ü.S.C. § 3809(b) •(1952 ed.) supra.
      
     
      
       See footnote 2, supra.
      
     