Opinion
No. J-83.
April 7, 1930.
Suit by the National Equipment Company against the United States.
Petition dismissed.
This suit is for the recovery of $20,638.87, as interest on overpayments of taxes for the years 1910, 1913, 1915, 1916, and 1920, credited against additional taxes for the years 1917, 1918, and 1919 assessed by the commissioner on March 10, 1926.
Plaintiff contends that additional taxes were assessed "under the revenue act of 1926" within the meaning of section 1116 of the revenue act of 1926 ( 26 USCA § 153 note), and that it is entitled to interest to March 10, 1926, the date of additional assessment.
The defendant takes the position that section 1116 provided for the payment of interest in case of a credit to the date of the assessment of the additional tax only in respect of the additional assessments for 1921 and subsequent years, and that therefore interest on the overpayments here involved was payable only to the due date of the additional tax against which the overpayments were applied as credits, and since interest has thus been paid, plaintiff is not entitled to recover.
Special Findings of Fact.1. Plaintiff, a Massachusetts corporation with principal office and place of business at Springfield, filed its return for 1910 on March 3, 1911, showing a tax of $173.65, which was paid June 30, 1911. February 27, 1912, it filed a return for 1911 showing a tax of $1,097.82, which was paid June 7, 1912. February 15, 1913, it filed a return for 1912 showing a tax of $1,078.68, which was paid July 9, 1913. February 26, 1914, it filed a return for 1913 showing a tax of $905.75, which was paid June 3, 1914. February 27, 1915, it filed a return for 1914 showing a tax of $69.68, which was paid May 29, 1915. February 26, 1916, it filed a return for 1915 showing a tax of $1,274.34, which was paid May 17, 1916. February 26, 1917, it filed a return for 1916 showing a tax of $2,998.23, which was paid June 15, 1917.
2. March 30, 1918, it filed an income and profits tax return for 1917 showing a tax of $24,795.24, which was paid June 14, 1918.
3. March 18, 1920, it filed a tentative return for 1918 on which it estimated a tax of $75,000. No assessment was made on this return. June 19, 1919, it filed a complete income and profits tax return for 1918 showing a tax of $63,063, which was paid in four installments of $18,750 on March 18, 1919, $12,781.50 on June 19, 1919, $15,765.75 on each of the dates September 15 and December 18, 1919.
4. March 15, 1920, it filed a tentative return for 1919 on which it estimated a tax of $350,000. No assessment was made on this return. May 15, 1920, it filed a complete income and profits tax return for 1919 showing a tax of $350,107.63, which was paid in four installments of $87,500 on March 23, 1920, $87,607.63 on June 16, 1920, and $87,500 each on September 15 and December 18, 1920.
5. March 18, 1921, it filed an income and profits tax return for 1920 showing a tax of $204,466.36, which was paid in four equal installments of $51,116.59 on March 18, June 21, September 21, and December 17, 1921.
6. February 6, 1920, the Commissioner of Internal Revenue, by letter, notified plaintiff of his determination of a deficiency of $13,577.66 for 1917, and this additional tax was assessed on May 3, 1920. This additional tax was paid after notice and demand on June 16, 1920.
7. After an examination and audit of the returns for 1910 to 1920, inclusive, the commissioner on November 28, 1925, notified plaintiff of his determination of overassessments of $50.24 for 1910, $244.34 for 1913, $167.27 for 1915, $58.79 for 1916, and $78,687.62 for 1920, and of deficiencies of $10,874.64 for 1917, $62,998.19 for 1918, and $21,540.04 for 1919; the total overassessments being $79,208.26 and the total deficiencies being $95,412.87; the excess of the deficiencies over the overassessments being $16204.61. On March 10, 1926, the commissioner assessed the deficiencies for 1917, 1918, and 1919 in the amounts stated. On March 13, 1926, he approved a schedule of overassessments, designated as Schedule IT:A: 19687, Form 7805, containing overassessments in respect of the tax of plaintiff for the years 1910 to 1916, inclusive, and for the year 1920, as stated above. This schedule was transmitted to the collector for his action in accordance with the directions appearing thereon. The collector complied, and on May 12, 1920, returned the schedule to the commissioner together with a schedule of refunds and credits, designated IT: R: 19687, Form 7805 — A, showing the amounts which should be credited against taxes for other years and the amount that should be refunded. Of the overpayment of $50.24 for 1910, $28.49 was applied against the deficiency in tax for 1917, and $21.75 was applied as a credit against the interest from February 26, 1926, to March 10, 1926. The overpayments of $244.33 for 1913, $167.27 for 1915, and $58.79 for 1916 were, also, applied as credits against the deficiency for 1917. Of the overpayment of $78,687.62 for 1920, $10,375.75 was applied as a credit against the balance of the deficiency for 1917, $62,998.19 was applied as a credit against the deficiency for 1918, $126 was applied as a credit against the interest on the deficiency for 1918 from February 26, 1926, to March 10, 1926, and the balance of $5,187.68 was applied as a credit against the deficiency for 1919, leaving a balance of $16,352.36 tax and $43.08 interest from February 26, 1926, to March 10, 1926, due for the year 1919, which the plaintiff paid on July 9, 1926, after notice and demand from the collector.
8. The commissioner allowed and paid interest on the overpayments for 1910 to 1916, inclusive, credited against the deficiency for 1917 from the dates paid to June 15, 1918. He allowed no interest on the overpayment of $78,687.62 for 1920 credited against the deficiencies for 1917, 1918, and 1919. On June 29, 1926, checks were mailed to the plaintiff for the amount of interest on the overpayments for 1910 to 1916, inclusive, together with schedule of overassessments for those years.
Charles H. Beckwith, of Springfield, Mass., and Miller Chevalier, of Washington, D.C., for plaintiff.
Charles R. Pollard, of Washington, D.C., and Herman J. Galloway, Asst. Atty. Gen. (Ralph E. Smith, of Washington, D.C., on the brief), for the United States.
Before BOOTH, Chief Justice, and GRAHAM, GREEN, LITTLETON, and WILLIAMS, Judges.
The question involved in this case is the same as that decided by the court in Riverside Dan River Cotton Mills, Inc., v. United States (Ct.Cl.) 37 F.2d 965, decided February 10, 1930.
The plaintiff contends that it is entitled to recover $20,638.87 as interest on the overpayments set forth in the findings of fact from the dates on which the overpayments were made to the date of the assessment of the additional tax for 1917, 1918, and 1919 against which the overpayments were applied as credits.
The question is governed by the opinion of the court in Riverside Dan River Cotton Mills, Inc., v. United States, supra, and, for the reasons stated in that case, the plaintiff is not entitled to recover. The petition must therefore be dismissed, and it is so ordered.
BOOTH, Chief Justice, and WILLIAMS, and GREEN, Judges, concur.
GRAHAM, Judge, concurs in view of the previous decisions of the court.