Earle v. United States

LITTLETON, Judge

(concurring).

I concur in the decision dismissing the petition but on the ground that the cause of action arose upon the delivery of the certificate of overassessment on July 19, 1923, and that this suit was not instituted until more than six years thereafter.

The plaintiff accepted as correct the statement of account by the Commissioner for the year 1916 showing his allowance of an overpayment of $5,322.25 for that year, which is the subject of this suit, but insisted, upon the receipt of the certificate of overassessment, as did the taxpayer in the case of Bonwit Teller & Co. v. United States, 283 U. S. 258, 51 S. Ct. 395, 75 L. Ed. 1018, that the 1916 overpayment should be refunded instead of credited, inasmuch as the tax for 1917 against which the credit had been made was barred by the statute of limitation. The protest with reference to the Commissioner’s action did not concern the statement of account of the amount due for 1916 as disclosed by the certificate of overassessment, but related to the Commissioner’s action with reference to the additional tax for 1917, as was the situation in the Bonwit Teller Case. The Commissioner declined to refund to plaintiff the overpayment allowed for 1916 on the ground that collection of the 1917 tax by credit occurred on March 31, 1923, when he signed the schedule of overassessments, and not on July 10, 1923, when he signed the schedule of refunds and credits, and it was not therefore barred. This position of the Commissioner was erroneous just as it was in the case of Bonwit Teller & Co. v. United States, supra, and this is now conceded by the defendant. When the Commissioner took this position and refused to pay to the plaintiff the 1916 overpayment allowed, plaintiff instituted a proceeding before the United States Board of Tax Appeals to contest the legality of the collection for 1917 and the Board decided the ease in his favor, holding that the 1917 tax was barred, but the Commissioner still refused to pay. Compare Ohio Steel Foundry Co. v. United States, 38 F.(2d) 144, 148, 69 Ct. Cl. 158; Arthur Curtiss James v. United States, 38 F.(2d) 140, 69 Ct. Cl. 215. Section 609 of the Revenue Act of 1928 (2:6 USCA § 2609) made the credit void. All of this, however, concerned 1917 and did not affect the statement of account for 1916. At the time of the Commissioner’s allowance of the overpayment for that year, and at all times since, the plaintiff has accepted the overpayment of $5,322.25 allowed for 1916 *853as correct. Payment thereof not having been made, the plaintiff, on June 21, 1928, filed a claim on form 843 asking that the same, with interest thereon, be credited against an outstanding assessment of tax for the calendar year 1927. Prior to the allowance of the overpayment of $5,322.25 for 1916, plaintiff had duly filed a claim for refund of $5,975.23 for 1916, which was allowed by the Commissioner to the extent mentioned.

The certificates of overassessment, in evidence as Exhibit Gr, which was addressed to the plaintiff at 165 Broadway, New York, N. Y., and which was mailed to him by the Commissioner July 19, 1923, stated in addition to the portions set forth in finding 5, as follows:

“No. 304567.

“Allowed: $5,322.25.

“An audit of your income tax return for 1916, form 1040, and examination of related claims (if any), indicates that the amount of tax assessed to you for this year was in excess of the amount due:

Previously assessed April 1917 list, 23-B, folio 16, line 2................................$10,533.84

Additional tax May 1920 list, page 29, line 7 7,658.85

Total tax assessable.......................... 18,192.69

Tax liability as disclosed by audit.......... 12,870.44

Overassessment ..............................$ 5,322.25

“The audit as made has been approved by. this office with the exceptions explained to

you in a previous communication from this Bureau.”

I think plaintiff had a right to file the claim for credit in June, 1928, and that the Commissioner had authority to credit the overpayment allowed in 1916 to the tax due for 1917 and should have done. so. Payment of the 1916 overpayment was not barred at the time the claim for credit was filed. However, I do not think the refusal of the Commissioner to make the credit requested brought the ease back under the provisions of section 3226 of the Revised Statutes (see 26 USCA § 156), and gave a new limitation period of two years after such refusal if such two-year period carried the limitation beyond the six years from the date of delivery of the certificate of overassessment. In Daube v. United States, 53 S. Ct. 597, 599, 77 L. Ed. -, decided May 8, 1933, the court said: “It [the Bonwit Teller Case] is a ruling not to be extended through an enlargement of the concept of an account stated by latitudinarian construction.”

This case in my opinion is on all fours with the Bonwit Teller Case, supra, but the petition was not filed within six years after the cause of action accrued.