Oak Worsted Mills v. United States

LITTLETON, Judge

(concurring).

On the theory that the court has jurisdiction to go into the question of the authority of the Commissioner to reconsider a determination made by him under sections 327 and 328 (401 Stat. 1093) and change his first determination and reassess and collect a portion of the profits tax theretofore determined under these sections, and refunded, I agree withthe foregoing opinion and the conclusion reached therein, but I think the claim of the plaintiff should be denied on the ground that the court is without jurisdiction to pass upon the question of the authority of the Commissioner in this ease.

This case relates entirely to a matter arising under the special-assessment provisions of the statute which confer discretionary power in the Commissioner to determine the facts and the rate of profits tax through a comparison of the plaintiff with other corporations specified in section 328. It appears that the plaintiff made a return for the year 1918 and paid á total income and profits tax of $91,944.37. This return showed a total net income of $124,488.61, the normal tax upon which was $4,158.30 and the excess profits tax, as computed under section 301 of the Revenue Act of 1918 (40 Stat. 1088), was $87,836.07. Thereafter plaintiff made application to the Commissioner for computation of its profits tax under section 328 of the said act, known as the special assessment provision, claiming that the profits tax of $87,-836.07 paid was too high and worked upon the plaintiff an exceptional hardship, as compared with other corporations similarly circumstanced. The Commissioner, in his discretion, concluded that this application should be granted, whereupon he made a computation under the special assessment sections, and on June 21, 1922, increased the net income of the plaintiff to $125,219.28, but eon-*704eluded that the excess profits tax, when determined under section 328, should be $57,-736.39 instead of $87,836.07. As a result, $26,487.97 of the profits tax paid on the return was refunded. In March, 1924, the Commissioner reconsidered his action taken under the special assessment provisions and made another determination of the amount of plaintiff’s profits tax under these provisions by comparison with other corporations and concluded that he, had made a mistake; that the correct comparison and computation showed a profits tax of $73,368.23, and that, as a result, he had refunded $13,756.02 too much. No change was made in the net income. He recomputed and reassessed this amount and upon receiving notice thereof the plaintiff filed .an abatement claim and a brief. Upon further consideration the Commissioner made a further comparison under the special assessment provisions, and upon a further reeomputation allowed the abatement claim for $6,354.76 and rejected it for $7,410.26. In August, 1925, the collector made demand for the payment of the last-mentioned amount, and in September, 1925, the plaintiff paid it, together with interest in the amount of $592.82. In this suit plaintiff asks judgment for the amount upon the ground that the Commissioner’s action on June 21, 1922, under the special assessment provisions refunding a portion' of the excess profits tax shown upon the return, was final, and that he was without authority to reassess and collect any portion of the amount so refunded.

To go into the question whether the Commissioner had authority to change his determination and reassess a portion of the tax refunded under the special assessment provisions would be the same as inquiring into the correctness of such determination. The amount which the Commissioner finally determined the plaintiff owed was less than the tax imposed by section 301. The entire matter was embraced within the provisions of section 328. Plaintiff claims that the amount refunded lost its character as a tax and could be recovered only by a suit in which it would be incumbent upon the government to prove that a refund was erroneous. In such a situation tbe court would not have jurisdiction to go into the matter. Williamsport Wire Rope Co. v. United States, 277 U. S. 551, 48 S. Ct. 587, 72 L. Ed. 985. And, however egregious the mistake in the first determination might have been, no portion of the amount erroneously repaid could he recovered by the government.

GRAHAM, Judge, concurs.