Opinion
No. 42135.
December 4, 1939.
Francis R. Lash, of Washington, D.C., for plaintiff.
John A. Rees, of Washington, D.C., and Samuel O. Clark, Jr., Asst. Atty. Gen., for defendant.
Before WHALEY, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHITAKER, Judges.
Proceeding by Champion Rivet Company against United States to recover income taxes and interest.
Petition dismissed.
Plaintiff sues to recover income tax of $74,077.37 and interest of $2,168.53, totaling $76,245.90, with interest of about $59,471 from September 13, 1926, on the ground that the tax and interest was prematurely assessed and collected and, therefore, that the payment on September 13, 1926, was an illegal and void collection under the provisions of sections 277 and 278 of the Revenue Act of 1926, 44 Stat. 58, 59, and section 607 of the Revenue Act of 1928, 26 U.S.C.A. § 1670(a)(2).
Special Findings of Fact
1. Plaintiff is now, and at all the times material herein was, an Ohio corporation with its office and principal place of business in Cleveland. It is engaged in the manufacture and sale of boiler and structural rivets, and coupler and air-brake pins.
2. April 15, 1921, plaintiff filed its income and profits tax return for 1920 and thereafter timely paid the tax shown due thereon. That tax is not in controversy in this proceeding.
3. December 11, 1925, after an audit of plaintiff's return, the Commissioner sent plaintiff a registered deficiency notice advising it of his determination of a deficiency for 1920 of $74,077.37.
4. December 29, 1925, plaintiff timely filed an appeal with the United States Board of Tax Appeals from the Commissioner's determination of the deficiency. June 15, 1926, before any hearing had been held upon that appeal, plaintiff's counsel submitted a stipulation to counsel for the Commissioner which he requested the latter to file with the Board "so that the appeal may be stricken from the calendar." The stipulation which was signed by counsel for plaintiff read as follows: "It is hereby stipulated that the petition on file for the year 1920 be, and the same is hereby, discontinued and withdrawn, without costs, and the taxpayer hereby consents to the assessment appealed from." The stipulation was signed by the General Counsel, Bureau of Internal Revenue, with the following notation: "No objection is made to the entry of an order of redetermination in this appeal showing a deficiency in tax due from the taxpayer for the year 1920 in the amount of $74,077.37, being the amount appearing in the deficiency letter, a copy of which is attached to taxpayer's petition filed in this appeal." The stipulation was thereafter filed with the Board, which, on July 26, 1926, entered the following order of redetermination:
"Under written stipulation signed by counsel for the parties to the above-entitled proceeding and filed with the Board on July 9, 1926, it is
"Ordered and decided that upon redetermination the deficiency for the year 1920 is $74,077.37."
5. August 21, 1926, the Commissioner signed an assessment list which included an assessment against plaintiff of the deficiency for 1920 as redetermined by the Board, together with interest in the amount of $2,168.53, a total assessment of $76,245.90, the interest assessed being computed at the rate of 6 percent per annum from the date of the enactment of the revenue act of 1926 to August 21, 1926, the date of the assessment of the tax. September 13, 1926, following receipt of notice and demand from the collector, plaintiff paid the total assessment of $76,245.90.
The "Remarks" column of the assessment list did not contain either the word "agreement" or the word "jeopardy," although it was the customary practice of the Bureau of Internal Revenue at that time to include the word "agreement" in that column in cases where the taxpayer had agreed to an immediate assessment and collection of the assessment and also to include the word "jeopardy" in those cases where the assessment was a jeopardy assessment.
Plaintiff never filed any written consent or waiver of the statutory restrictions upon the assessment and/or collection of the deficiency for 1920 other than the extent to which a consent or waiver might be inferred from the stipulation filed with the Board and referred to in finding 4. Nor did plaintiff take any action to enjoin the making of the assessment or collection.
6. March 4, 1930, plaintiff filed a claim for refund of the entire amount assessed and paid, as set out in the previous finding, and assigned the following basis therefor:
"The tax ($74,077.37) and interest ($2,168.53) was assessed and collected after five years after the return for year 1920 was filed. The return for year 1920 was filed on or before April 15, 1921, and the tax was assessed in August 1926, and collected September 13, 1926. At the time the tax was assessed legal assessment was barred by Sections 277 and 278 of the Revenue Act of 1926, and may be refunded in accordance with Section 607 of the Revenue Act of 1928."
The Commissioner disallowed that claim on a schedule dated July 11, 1930, and advised plaintiff of such disallowance in a letter of the same date.
7. September 11, 1930, plaintiff filed a further claim for refund which assigned as one ground that "The deficiency was assessed and/or collected at a time when the act of so doing was prohibited or not permitted by the revenue laws." The Commissioner disallowed that claim on a schedule dated December 26, 1930, and advised plaintiff of his action in a letter of the same date. These refund claims are made a part of these findings by reference.
The contentions of plaintiff in this case are the same as the contentions advanced by it in support of its claimed right to recover the tax assessed and collected in Lehigh Portland Cement Company v. United States, Ct.Cl., 30 F. Supp. 217, decided this date. For the reasons stated in the opinion in these cases, we hold that plaintiff is not entitled to recover in this case.
Upon the particular facts disclosed by the record in this case, there are additional reasons why recovery cannot be had. The facts show that upon receipt of the Commissioner's deficiency notice plaintiff filed a petition with the U.S. Board of Tax Appeals and that before any assessment or attempted collection was made, the plaintiff, on June 15, 1926, filed with the Commissioner's counsel a written stipulation signed by it which went to the Commissioner's office with the record in the case, and which stipulation plaintiff requested the Commissioner to file with the Board of Tax Appeals "so that the appeal may be stricken from the calendar." In this written stipulation and consent the taxpayer agreed that the petition on file with the Board for 1920 be discontinued and withdrawn and stated that "the taxpayer hereby consents to the assessment appealed from." The Commissioner made a notation upon the written request, stipulation, and consent of the taxpayer that he had no objection to the same and to the entry of an order by the Board redetermining the deficiency in the amount which he had determined and of which he had duly notified the taxpayer. Accordingly, on July 26, 1926, the Board, pursuant to plaintiff's written consent, entered judgment for the deficiency of $74,077.37. This written stipulation by plaintiff was a plain agreement to the deficiency determined by the Commissioner and we think it was also a consent to its immediate assessment and collection. Obviously the plaintiff's written consent could have had no other purpose, unless the appeal had been filed purely for the purpose of delay, which the statute condemns. See section 1000, Title X, Revenue Act of 1926, amending section 911 of the Revenue Act of 1924, 26 U.S.C.A. § 617(g). It is not necessary that a taxpayer use any particular form or state its consent by the use of any particular words if consent results or may be held to be reasonably intended by what is said. In this case the taxpayer stated that it desired to discontinue and withdraw its petition and consent to the assessment appealed from. This can only mean that the taxpayer was waiving its right to proceed with the case before the Board and consenting to assessment of the deficiency, in respect of which the petition had been filed with the Board. The waiver was not conditional. Compare Columbian Carbon Co. et. al. v. United States, 77 Ct.Cl. 768, 3 F. Supp. 536.
In a case like the one at bar, or where the taxpayer consents to and stipulates with the Commissioner with respect to the amount of the judgment to be entered by the Board in a case in which the Commissioner has determined a deficiency, there exists no right of appeal, for a taxpayer cannot appeal from a judgment of the Board of Tax Appeals to which he has expressly agreed. On August 21, 1926, almost a month after the Board's decision had been entered, the Commissioner assessed the deficiency to which the taxpayer had agreed, together with interest to the date of assessment. Any further delay in assessing would only have resulted in the payment of a greater amount of interest by plaintiff. Thereafter, on September 13, 1926, upon receipt of notice and demand from the collector, plaintiff paid the amount of tax and interest assessed. Plaintiff did not at any time seek to enjoin collection, even if it might have done so in the circumstances.
Plaintiff is not entitled to recover, and the petition is dismissed. It is so ordered.