Hart Glass Mfg. Co. v. United States

Full title: HART GLASS MFG. CO. v. UNITED STATES

Court: Court of Claims

Date published: Apr 6, 1931

48 F.2d 435 (Fed. Cir. 1931)

Opinion

No. H-528.

April 6, 1931.

Suit by the Hart Glass Manufacturing Company against the United States.

Petition dismissed.

This suit involves the right of the plaintiff to recover the sum of $11,500.63, an admitted overpayment of its income and profits taxes for the year 1918.

Two issues of law are presented for determination:

First, the authority of the Commissioner of Internal Revenue to apply the amount of the said overpayment to the payment of taxes due for the said year from the T.F. Hart Paper Company, an affiliated corporation, in the absence of an agreement between the two affiliated corporations as to the proportion in which the total taxes due shall be assessed against each of them respectively; and second, whether or not, in case the Commissioner's action was erroneous in applying the said overpayment in the manner stated, the plaintiff's suit to recover the same is barred by the statute of limitations.

This case having been heard by the Court of Claims upon a stipulation of facts, signed on behalf of plaintiff by its attorney, Frank C. Olive, and on behalf of the defendant by Assistant Attorney General Herman J. Galloway, and upon the report of a commissioner and the evidence, the court makes the following special findings of fact:

1. Plaintiff, Hart Glass Manufacturing Company, was during the times herein mentioned, and now is, a corporation organized on March 31, 1918, existing and operating under and by virtue of the laws of the state of Indiana with its principal place of business at Dunkirk, Ind.

2. T.F. Hart Paper Company was at the times mentioned, and now is, a corporation existing under and by virtue of the laws of the state of Indiana with its principal offices in Muncie, Ind.

3. On April 29, 1919, plaintiff, Hart Glass Manufacturing Company, filed its corporation income and profits tax return for the fiscal period April 13, 1918, to January 18, 1919, showing a tax due in the amount of $19,470.40, which was duly assessed on said return on the Commissioner's March, 1919, supplemental list No. 40133, and paid in full by plaintiff on March, 15, June 15, September 15, and December 15, 1919; and on March 15, 1920, plaintiff filed its amended corporation income and profits tax return for the period January 19, 1918, to January 18, 1919, showing a tax due in the amount of $15,321.38.

On March 15, 1920, plaintiff filed its claim for refund No. 10282 of the tax so paid in the amount of $4,149.02, which claim was rejected February 11, 1924.

On February 11, 1924, the Commissioner found and determined the amount of tax due from the taxpayer for the year 1918, and on the Commissioner's March, 1924, special No. 4 list, page 1, line 4, made an additional assessment of tax on said return against the plaintiff in the amount of $45,901.03, as outlined in bureau letter dated February 12, 1924.

On March 15, 1924, plaintiff filed its claim for abatement No. 591745 of an additional assessment of tax made on the Commissioner's March, 1924, special No. 4 list, page 1, line 4, in the amount of $45,901.03, which claim was allowed in full by the Commissioner on December 27, 1926, C. of O. No. 591757-IT23986.

The assessment of tax against plaintiff for the year 1918 was adjusted by the Commissioner as follows:

March, 1919, supplemental No. 40133 list .... $19,470 40 Additional assessment, commissioner's March, 1924, special #4 list, page 1, line 4 45,901 03 __________ Total assessment .......................... $65,371 43 Less overassessment #3591757-IT23986 ........ 58,831 97 __________ Corrected assessment ...................... $ 6,539 46

On March 11, 1924, plaintiff filed its claim for refund No. 702298 of the tax so paid in the amount of $10,000 to protect its right to receive a refund after the five-year limitation period had expired, which claim was duly rejected by the Commissioner on May 21, 1924.

On December 19, 1926, the Hart Glass Manufacturing Company and the T.F. Hart Paper Company filed a joint claim for refund No. 984892 of tax so paid in the amount of $20,000, which was signed "Hart Glass Manufacturing Company, T.F. Hart Paper Company, F.H. May, secretary."

4. Plaintiff's said claim for refund No. 702298 was as follows:

"Line 6. Amount to be refunded (or such greater amount as is legally refundable), $10,000.00.

"Deponent verily believes that this application should be allowed for the following reasons:

"This claim for refund in the amount of $10,000.00 is filed at this time to protect our right to receive a refund after the five-year limitation period has expired, or that amount or such larger amount as may be legally refundable."

5. Said joint claim for refund No. 984892 contained the following words and figures:

"Line 6. Amount to be refunded (or such greater amount as is legally refundable) $20,000.00."

Also the following words and figures:

"Deponent verily believes that this application should be allowed for the following reasons:

"This claim for refund is filed to protect the rights of the taxpayers under the statute of limitations and is based upon an application for special assessment under sections 327-328, revenue act of 1918, filed with the Commissioner of Internal Revenue in the taxpayers' brief on May 1, 1924. The case is now pending in the special assessment section. Waivers on file for 1918 expire December 31, 1926. The amount shown on line 6 is estimated and subject to change upon final determination of the tax liability."

6. From the year of 1918 to the year of 1922, F.H. May, who signed the December 19, 1926, joint claim for refund referred to in paragraph 4 hereof, was vice president and secretary of the Hart Glass Manufacturing Company. At some time during the year of 1922 he became vice president and treasurer of that company, and has continued to occupy those offices down to the present time.

During the years 1916 to 1922, inclusive, Mr. F.H. May was secretary and treasurer of the T.F. Hart Paper Company.

7. On April 29, 1919, the T.F. Hart Paper Company filed its corporation income and profits tax return for the calendar year 1918, showing a tax due in the amount of $18,901.96, which was duly assessed on said return on the Commissioner's March, 1919, No. 401477 list, and paid in full by said company on March 15, June 15, September 15, and December 15, 1919; and on March 15, 1920, said company filed its amended corporation income and profits tax return for said year showing a tax due in the amount of $16,295.72.

On March 18, 1920, said company filed its claim for refund of tax so paid in the amount of $2,606.24.

On October 28, 1925, said company filed an assessment waiver which expired on December 31, 1926.

On February 11, 1924, the Commissioner found and determined the amount of tax due from the taxpayer for the year 1918, and on the Commissioner's March, 1924, special No. 4 list, page 1, line 5, made an additional assessment of tax on said return against said company in the amount of $19,047.98, as outlined in bureau letter dated February 12, 1924.

The assessment of tax against said company for the year 1918 was adjusted by the Commissioner as follows:

Original assessment account No. 401477 ... $18,901 96 Additional assessment March, 1924, special #4 list, page 1, line 5 ................. 19,047 98 __________ Total assessment ....................... $37,949 94 Less: Overassessment January 19, 1927, C. of O. #591757, Schedule #23986 .......... 1,747 81 __________ Corrected assessment .................. $36,202 13

8. On October 28, 1925, plaintiff, Hart Glass Manufacturing Company, and said T.F. Hart Paper Company each entered into an agreement with the Commissioner of Internal Revenue by virtue of which plaintiff and said paper company each waived the time prescribed by law for making any assessment of the amount of income, excess profits or war profits taxes due under any return made by plaintiff or said paper company for the year 1918, under existing revenue acts or prior revenue acts. Each of said waivers contained the following provision:

"This waiver of the time for making any assessment as aforesaid shall remain in effect until December 31, 1926, and shall then expire except that if a notice of a deficiency in tax is sent to said taxpayer by registered mail before said date and (1) no appeal is filed therefrom with the United States Board of Tax Appeals then said date shall be extended sixty days, or (2) if an appeal is filed with said board then said date shall be extended by the number of days between the date of mailing of said notice of deficiency and the date of final decision by said board." These written consents were the first and only ones executed.

9. On December 27, 1921, the Hart Glass Manufacturing Company and the T.F. Hart Paper Company made application for and filed an affiliated corporations' questionnaire, executed on December 21, 1921, covering the years 1918 to 1921, which shows ownership and control of said companies during such years to be as follows:

============================================================================================================= | | Hart Glass Mfg. Co. | T.F. Hart Paper | Stockholder | | | | No. 1 | Co. No. 2 |-----------------------------------------------------|-------------------------|------------------------ No. | | Relation to other stockholders | Number | Per cent | Number | Per cent | Name | and official connection | of shares | of holdings | of shares | of holdings | | with company | held | | held | |--------------------|--------------------------------|-----------|-------------|-----------|------------ 1 | T.F. Hart ........ | Pres. both companies ......... | 2,700 | 90 | 545 | 90.8 2 | F.H. May, Nephew | Secy. treas. both co's. .... | 100 | 3 1/3 | 5 | 9/10 | #1. | | | | | 3 | T. Francis Hart .. | Vice pres. #1, nephew #1 | 100 | 3 1/3 | ......... | ........... 4 | A.M. Hart ........ | Vice pres. #2, wife #1 ....... | 100 | 3 1/3 | 50 | 8 1/3 ------------------------------------------------------------------------------------------------------------- And that both companies were, in fact, owned and controlled by T.F. Hart, and that the holdings of F.H. May, T. Francis Hart, and A.M. Hart were acquired by them as a gift from T.F. Hart.

10. T.F. Hart did not retain any option from F.H. May, T. Francis Hart, and A.M. Hart to repurchase the capital stock so given them, and the gift from T.F. Hart to said other stockholders was not conditioned in any way, but the recipients of said stock became immediately the absolute owners thereof; dividends were thereafter distributed to the stockholders according to their stockholdings.

11. On February 8, 1922, the Commissioner of Internal Revenue ruled that the Hart Glass Manufacturing Company and the T.F. Hart Paper Company were affiliated for the year 1918 within the purview of section 240 of the Revenue Act of 1918 ( 40 Stat. 1081). The T.F. Hart Paper Company was used as principal company, and audit was subsequently made on a calendar year basis.

An application was made to the Commissioner of Internal Revenue by the plaintiff and the T.F. Hart Paper Company on November 7, 1923, that the taxes of said companies be computed under the provisions of sections 327 and 328 of the Revenue Act of 1918 ( 40 Stat. 1093).

On November 6, 1926, the Commissioner adjusted the assessments of tax made against said affiliate companies, as outlined in bureau letter dated December 27, 1926, as follows:

Hart Glass Manufacturing Company ..... $ 6,539 46 T.F. Hart Paper Company .............. 36,202 13

The change in assessment of said tax from that outlined in prior audits was due to the application of a loss for 1919 against income for 1918 under the provisions of section 204 of the Revenue Act of 1918 ( 40 Stat. 1060) the amount of special assessments, and other adjustments not in question in this action.

12. On December 27, 1926, the Commissioner of Internal Revenue addressed a letter to the T.F. Hart Paper Company informing it that an audit of its income and profits tax returns and those of its affiliated company, to wit, the Hart Glass Manufacturing Company, had been made for the years 1917, to 1920, inclusive, and informed it of the determinations which the Treasury Department had made with reference to the taxes of those two companies for the years involved in the audit.

The bureau letter shows an overassessment of $1,747.81 against the T.F. Hart Paper Company, although there was an actual assessment of $17,300.17, which is the difference between the original payment and the adjusted assessment. A claim for abatement was filed covering the additional assessment made on the March, 1924, special No. 4 list, page 1, line 5, in the amount of $19,047.98.

Said bureau letter shows an overassessment of $58,831.07 against the Hart Glass Manufacturing Company, $45,901.03 of which was credited by the commissioner against the assessment of $45,901.03 on the March, 1924, special No. 4 list, page 1, line 4, against which claim for abatement was filed, and $1,430.31 was credited against the assessment of plaintiff for the year 1920. The assessment balance of $11,500.63, the amount in suit, was credited by the Commissioner of Internal Revenue against the assessment of tax of the T.F. Hart Paper Company, principal, and plaintiff's affiliate for the taxable year 1918.

In making the final determination of the tax liability of the plaintiff and the T.F. Hart Paper Company for the year 1918, as shown by the aforesaid bureau letter of December 27, 1926, the Commissioner first computed the tax as a unit on the basis of the consolidated net income of the two companies, as shown by the consolidated return, and then apportioned the taxes between them on the basis of the net income properly assignable to each. The determination was also made under the provisions of sections 327-328 of the revenue act of 1918.

13. No agreement was ever had or made between plaintiff and said T.F. Hart Paper Company as to the proportionate assessment of tax to be made against each by reason of such consolidation and affiliation for the year 1918, and such assessment was made by the Commissioner of Internal Revenue in conformity with the provisions of section 240 of the Revenue Acts of 1918 ( 40 Stat. 1081) and 1921 ( 42 Stat. 260).

14. There were no financial or contractual connections of any kind between the two corporations, except that at one time, as a matter of convenience, one company loaned the other some money with which to pay interest, which loan was evidenced by a note which at its maturity was retired.

15. The plaintiff never had any agreement of any kind whatsoever with T.F. Hart Paper Company relative to paying or assuming any tax liability of the paper company, unless such an agreement can be implied by law as applied to the facts.

The corporation income and profits taxes of the two corporations for the year 1918 were paid to the collector of internal revenue by the separate checks of each of the companies, drawn on their respective banks.

16. Under date of July 6, 1927, plaintiff wrote the Commissioner of Internal Revenue as follows:

"Sir: The collector of internal revenue on Schedule 2398 credited an overassessment of $11,500.63 (T.F. Hart Paper Company) against the 1918 additional taxes of the Hart Glass Manufacturing Company.

"Inasmuch as the collector had no authority to make this credit, it has been requested that his action be reversed and that the overassessment of $11,500.63 be certified for refund and interest allowed thereon. Under date of May 18, 1927, the collector wrote the Accounts and Collection Division in connection with this matter, and we would now thank you to advise the present status of the case.

"Requisite power of attorney has been filed with the Income Tax Unit."

17. Under date of August 13, 1927, the Commissioner of Internal Revenue replied to plaintiff's said letter of July 6, 1927, as follows:

"Sir: Reference is made to your letter dated July 6, 1927, in which you take exception to the adjustment of an overassessment of income tax allowed to the above-named taxpayer for the year 1918 on the ground that the portion of the overpayment that was credited to tax assessed for the same year in the name of T.F. Hart Paper Company was erroneously applied and should be refunded with interest.

"Office records show that of the total amount overassessed for the year involved, $45,901.03 was abated, $1,430.31 was credited to additional tax assessed against the Hart Glass Manufacturing Company for the year 1920, and $11,500.63 was credited to additional tax assessed against the T.F. Hart Paper Company for the year 1918.

"Interest in the amount of $150.18 was allowed on that portion of the overassessment credited to additional 1920 tax, from June 15, 1919, to March 15, 1921, covering the period from the date of payment of the tax overassessed to the due date of the tax to which credit was applied, as provided by section 1116 of the revenue act of 1926 ( 26 USCA § 153 note). No interest was allowed on $11,500.63, the balance overpaid, for the reason that credit in this amount was applied to taxes due before the overpayment was made and there was, therefore, no period during which interest could accrue on the amounts so credited.

"With reference to your contention that the collector had no authority to make this credit, you are advised that the adjustment was made in accordance with the general practice of this office, and it appears to meet every requirement of law.

"An examination of the case discloses that the business of the two taxpayers concerned is so closely interrelated that the allowance of the overassessment and the assessment of additional tax for the same year are to a considerable degree nominal transactions, resulting from a reallocation of tax liability, and occasioned by the requirements of proper bookkeeping and accounting.

"The adjustment you request would require the withdrawal from the Treasury of an amount paid in satisfaction of the tax on a definite taxable income, and the collection of the same amount of tax relating to the same taxable income for the same year.

"Such an adjustment would, moreover, defeat the plain intent of Congress with regard to the payment of interest, as set forth in section 1116 of the revenue act of 1926. This section amended the interest provisions of the previous act, for the definite purpose of relieving the Government of the payment of interest on an over-assessment allowed to a taxpayer over a period of years during which the taxpayer owed a like amount of money on which no interest is collectible. The purpose of this provision can be met only by affecting an offset of overpayments against underpayments, as was done in the instant case and is consistently done in similar cases. It is believed that this policy is not only authorized but is in effect, required by section 1116 of the revenue act of 1926, in any case where the overassessments and additional taxes, even though appearing under different names, relate to the same income.

"In view of these facts it is believed that the credit under discussion has been correctly applied and no readjustment can be made."

18. On September 24, 1927, C.R. Nash, assistant to the Commissioner of Internal Revenue, wrote a letter to the representative of the plaintiff, which is as follows:

"Sir: Further reference is made to the adjustment of an overassessment of income tax allowed to the above-named taxpayer for the year 1918, $11,500.63 of which was credited to additional tax for the same year, assessed against the T.F. Hart Paper Company.

"Full consideration has been given to your contention that this office had no authority to effect such a credit and that the amount so credited should be refunded, with interest.

"The adjustment was made, however, in accordance with the fixed policy of this office with regard to crediting overpayments against underpayments, as set forth in office letter to you dated August 13, 1927, and there is no known provision of law nor any circumstance in this particular case which appears to require such an adjustment as you request.

"In view of these facts this office must consider the case closed."

19. No action has been had upon this claim in Congress nor by any departments of the Government; plaintiff has in no way voluntarily aided, abetted, or given encouragement to rebellion against the government; plaintiff is, and always has been, the sole and absolute owner of the claim presented herein, and has made no transfer or assignment of said claim or any part thereof or interest therein.

Frank C. Olive, of Indianapolis, Ind., for plaintiff.

Ralph C. Williamson, of Washington, D.C., and Herman J. Galloway, Asst. Atty. Gen. (Charles P. Sisson, of Washington, D.C., on the brief), for the United States.

Before BOOTH, Chief Justice, and WILLIAMS, LITTLETON, and GREEN, Judges.

WILLIAMS, Judge.

This is a suit to recover the sum of $11,500.63, with interest thereon, which the plaintiff alleges is due it as an overpayment of its income and profit taxes for the year 1918.

The plaintiff, the Hart Glass Manufacturing Company, and the T.F. Hart Paper Company, are each corporations doing business under and by virtue of the laws of the state of Indiana.

The two companies filed separate income tax returns for the year 1918, and paid the taxes assessed against them on such returns by separate checks drawn on their respective banks.

On December 27, 1921, the plaintiff and the paper company made application to have their tax liability for the years 1918 and 1921 computed on the basis of affiliated corporations. The Commissioner of Internal Revenue, on February 8, 1922, ruled they were affiliated corporations for the year 1918 within the purview of the Revenue Act of 1918. The T.F. Hart Paper Company was used as the principal company.

An application was made to the Commissioner of Internal Revenue by the plaintiff and the T.F. Hart Paper Company, on November 7, 1923, that the taxes of the said companies be computed under sections 327-328 of the Revenue Act of 1918 ( 40 Stat. 1093).

The Commissioner of Internal Revenue on February 11, 1924, made an additional assessment against the plaintiff in the amount of $45,901.03, and an additional assessment against the T.F. Hart Paper Company in the amount of $19,047.98. These additional assessments were made on the basis of the affiliation of the two companies, but not under the special assessment provisions of sections 327-328 of the Revenue Act of 1918. Both the plaintiff and the paper company, in apt time, filed their claims for the abatement of the additional assessments made against them respectively.

On November 6, 1926, the Commissioner of Internal Revenue made final adjustment of the assessment of taxes made against the plaintiff and the T.F. Hart Paper Company as affiliated corporations for the year 1918. The adjustment of assessments was made under the provisions of sections 327-328 of the Revenue Act of 1918, and, as outlined in bureau letter dated December 27, 1926, was as follows:

Hart Glass Manufacturing Company ....... $ 6,539 46 T.F. Hart Paper Company ................ 36,202 13

The Commissioner's letter of December 27, 1926, explaining the basis on which the final adjustment of the taxes of plaintiff and the T.F. Hart Paper Company for 1918 was made, shows an overassessment against each of the companies for the year, which overassessments to the extent not paid were abated by the Commissioner. It further shows an overpayment in the sum of $12,930.94 by the plaintiff of its taxes, and a balance due from the T.F. Hart Paper Company on its taxes for the year in the amount of $17,300.17.

The Commissioner applied $1,430.31 of the amount of the plaintiff's overpayment of its taxes against an unpaid assessment of taxes against plaintiff for the year 1920, and the balance, $11,500.63, was credited by the Commissioner, without the consent of the plaintiff, against taxes due from the T.F. Hart Paper Company for the year 1918, which amount the plaintiff seeks to recover in this suit.

The first question presented is whether the Commissioner could legally apply an overpayment of the plaintiff's taxes for the year 1918 to the payment of taxes due from the T.F. Hart Paper Company for the said year on the ground that they were affiliated companies.

Section 240 of the Revenue Act of 1918 ( 40 Stat. 1081), provides:

"In any case in which a tax is assessed upon the basis of a consolidated return, the total tax shall be computed in the first instance as a unit and shall then be assessed upon the respective affiliated corporations in such proportions as may be agreed upon among them, or, in the absence of any such agreement, then on the basis of the net income properly assignable to each."

There was no agreement between the plaintiff and the T.F. Hart Paper Company as to the proportions in which the taxes due under the consolidated net income should be assessed against each of them, respectively, and there was no agreement between them which obligated the plaintiff to pay or assume any of the tax liability of the T.F. Hart Paper Company for the year 1918.

The Commissioner of Internal Revenue in his determination of the tax liability of the plaintiff and the paper company, as affiliated corporations for the year 1918, on both February 11, 1924, when the additional assessment against the two corporations was made, and on November 6, 1926, when final adjustment of such assessments was made, in which it was determined there was an overassessment against each company, acted in strict compliance with the statute. In each instance he first computed the total tax liability of the two companies as a unit, and then apportioned the tax between them on the basis of the net income properly assignable to each. In the absence of an agreement between plaintiff and the T.F. Hart Paper Company that their taxes as affiliated corporations should be otherwise apportioned, the Commissioner was bound by the plain provisions of the statute to assess the tax against them in the proportion of their respective net incomes to the total net consolidated income as shown by the return. Swift Co. v. United States, 69 Ct. Cl. 171.

The Board of Tax Appeals has consistently held, and we think rightly so, that for the purpose of assessment and collection of taxes the separate identity of each corporation in an affiliated group is recognized.

In American Creosoting Company v. Commissioner, 12 B.T.A. 247, the board said:

"A corporation affiliated with another corporation under section 240 of the Revenue Act of 1918 does not lose its status as a 'taxpayer' and an assessment against such corporation in the absence of an agreement that the taxes due from other affiliated corporations may be collected from it will not authorize the collection from it of taxes due from such other corporations, and a notice to it of a deficiency in taxes due from other affiliated corporations joining with it in filing a consolidated return will not authorize the filing with the board of petitions for the redetermination of deficiencies by other affiliated corporations."

Nelson T. Hartson, Solicitor of Internal Revenue, in L.O. 1113 — C.B. III — 2 — 36, said in regard to section 240 of the Revenue Act of 1918:

"This section, however, does not make of the affiliate group a single taxable entity so far as the payment of the tax is concerned; it provides that where the tax is assessed on the basis of a consolidated return, it shall be computed in the first instance as a unit, and shall then be assessed upon the respective affiliated corporations in such proportions as may be agreed upon among them, or, in the absence of any such agreement, then on the basis of the net income properly assignable to each. The act does not provide that the affiliate group is a single 'taxpayer'; on the contrary, since each member of the affiliated group is a taxpayer, subject to the tax imposed by the act, it is a 'taxpayer' within the meaning of the term as defined in section 1."

The statute authorizes an overpayment to be credited "against any income, war-profits, or excess-profits tax or installment thereof then due from the taxpayer." (Italics ours.) This language does not authorize such overpayment to be credited against taxes due from any taxpayer other than the one making the overpayment. The taxpayer making the overpayment in this case was the plaintiff. The commissioner applied such overpayment to the payment of taxes due from another taxpayer. His action in that respect was erroneous.

The next question to be considered is the plaintiff's right, in this suit, to recover the amount of the overpayment of its 1918 taxes which was wrongfully credited by the commissioner against taxes due from the T.F. Hart Paper Company.

The defendant contends plaintiff's right to maintain its suit is barred by the statute of limitations, because of its failure to file a sufficient claim for refund within the time required by law.

Compliance with the statutory requirement with reference to the filing of claims for a refund of taxes is a condition precedent to the right of a taxpayer to maintain a suit for the recovery of such taxes. Feather River Lumber Co. v. United States, 66 Ct. Cl. 54; Hazel M. Davis v. United States, 67 Ct. Cl. 643; Swift Co. v. United States, 68 Ct. Cl. 97; Kings County Savings Institution v. Blair, 116 U.S. 200, 6 S. Ct. 353, 29 L. Ed. 657; Rock Island Railroad Company v. United States, 254 U.S. 141, 41 S. Ct. 55, 65 L. Ed. 188.

The Revenue Act of 1924, § 281 (26 USCA § 1065 note), provides:

"(b) Except as provided in subdivisions (c) and (e) of this section, (1) no such credit or refund shall be allowed or made after four years from the time the tax was paid, unless before the expiration of such four years a claim therefor is filed by the taxpayer. * * *

"(e) If the taxpayer has, within five years from the time the return for the taxable year 1917 was due, filed a waiver of his right to have the taxes due for such taxable year determined and assessed within five years after the return was filed, or if he has, on or before June 15, 1924, filed such a waiver in respect of the taxes due for the taxable year 1918, then such credit or refund relating to the taxes for the year in respect of which the waiver was filed shall be allowed or made if claim therefor is filed either on or before April 1, 1925, or within four years from the time the tax was paid.

"(f) This section shall not (1) bar from allowance a claim for credit or refund filed prior to the enactment of this Act which but for such enactment would have been allowable. * * *"

The Revenue Act of 1926, § 284 (26 US CA § 1065) provides:

"(g) If the taxpayer has, within five years from the time the return for the taxable year 1917 was due, filed a waiver of his right to have the taxes due for such taxable year determined and assessed within five years after the return was filed, or if he has, on or before June 15, 1924, filed such a waiver in respect of the taxes due for the taxable year 1918, then such credit or refund relating to the taxes for the year in respect of which the waiver was filed shall be allowed or made if claim therefor is filed either on or before April 1, 1925, or within four years from the time the tax was paid. * * *

"(h) Except as provided in subdivision (d) this section shall not (1) bar from allowance a claim for credit or refund filed prior to the enactment of this Act which but for such enactment would have been allowable. * * *"

Section 1113. (a) Section 3226 of the Revised Statutes (26 USCA § 156), as amended, is re-enacted without change, as follows:

"Sec. 3226. No suit or proceeding shall be maintained in any court for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected until a claim for refund or credit has been duly filed with the Commissioner of Internal Revenue, according to the provisions of law in that regard, and the regulations of the Secretary of the Treasury established in pursuance thereof; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. No such suit or proceeding shall be begun before the expiration of six months from the date of filing such claim unless the commissioner renders a decision thereon within that time, nor after the expiration of five years from the date of the payment of such tax, penalty, or sum, unless such suit or proceeding is begun within two years after the disallowance of the part of such claim to which such suit or proceeding relates. * * *"

The plaintiff filed three claims for a refund in respect to its 1918 taxes, as follows:

(1) On March 15, 1920, a claim for the refund of $4,149.02, which claim was rejected by the Commissioner on February 11, 1924.

(2) On March 11, 1924, a claim for refund in the amount of $10,000. The claim stated no ground for a refund other than that it was filed to protect the plaintiff's rights against the running of the statute of limitations. It was rejected by the Commissioner on May 21, 1924.

Neither of these rejected claims was, after its rejection, reopened or reconsidered by the Commissioner, nor were they amended, or sought to be amended, by the filing of any subsequent claim. This suit was begun December 22, 1927, more than five years after the payment of the taxes sought to be recovered, and also more than two years after the rejection of the said claims by the Commissioner, and is barred by the statute of limitations, in so far as such claims are concerned.

The plaintiff, however, does not rely upon the aforesaid rejected claims for refund as a basis of its suit, but relies upon (3) the joint claim for refund filed by it and the T.F. Hart Paper Company on December 17, 1926. This claim asks for a refund of $20,000, and reads as follows:

"This claim for refund is filed to protect the rights of the tax-payers under the statute of limitations and is based upon an application for special assessment under sections 327-328, revenue act of 1918, filed with the Commissioner of Internal Revenue in the taxpayers' brief on May 1, 1924. The case is now pending in the special assessment section. Waivers on file for 1918 expire December 31, 1926. The amount shown on line 6 is estimated and subject to change upon final determination of the tax liability."

The plaintiff contends this claim is valid, and, by virtue of the waiver filed on October 28, 1925, extending the time in which assessment of the plaintiff's 1918 taxes might be made until December 31, 1926, was filed within the time prescribed by law.

The waiver in question was filed subsequent to the time fixed in the Revenue Acts of 1924 and 1926 in which the filing of a waiver would operate to extend the time for filing claims for refund. Furthermore, the claim for refund relied upon was filed more than a year after the period had elapsed in which such claim was required to be filed.

By virtue of section 278(c) of the Revenue Acts of 1924 and 1926 ( 26 USCA § 1060), the waiver herein, although filed after the limitations had run against the assessment of taxes against the plaintiff for the year 1918, revived in the Commissioner authority to make an assessment within the period covered by the waiver. Stange v. United States, 282 U.S. 270, 51 S. Ct. 145, 75 L. Ed. ___. Such waiver, however, filed after the date prescribed in section 281(e) of the Revenue Act of 1924 and section 284(g) of the Revenue Act of 1926, did not operate to extend the time in which claim for refund could be filed under the provisions of said sections.

In Burnet v. Chicago Railway Equipment Co., 282 U.S. 295, 51 S. Ct. 137, 139, 75 L. Ed. ___, the court said:

"Attention is also called to section 281(e) of the 1924 act, which extended the time for making claims for refund where a waiver of assessment had been filed prior to certain specified dates, and it is said that section 278(c), as interpreted, would, when read with section 281(e), result in a discrimination against those taxpayers who had signed a waiver after the statute had run. The argument is that such taxpayers would still be liable for the tax, but that no corresponding extension of the limitation on claims for refund would be given. The dates specified in section 281(e), however, do not coincide with the periods of limitation on assessment and collection. The purpose of that section was merely to extend the time for filing claims for refund in particular cases of taxes for the years 1917-1919. There is no necessary relation between it and section 278(c)."

Neither waiver nor claim for refund was filed within the time required by law, and the plaintiff's right to bring suit to recover the amount of the overpayment of its taxes for the year 1918 was barred by the statute of limitations when the petition herein was filed, December 23, 1927. The Commissioner had no legal authority to allow the refund, and no right to interest on the overpayment ever attached.

Plaintiff's petition is therefore dismissed. It is so ordered.

BOOTH, Chief Justice, and LITTLETON and GREEN, Judges, concur.

WHALEY, Judge, did not hear this case and took no part in its decision.