The opinion of the court was delivered by: KNIGHT
Plaintiff sues to recover $11,048.70 on account of the alleged overpayment of its income and excess profits tax. On March 11, 1921, plaintiff filed its income and excess profits tax return for the year 1920, disclosing a tax liability of $102,517.20. The certificate of liability, including such tax, was signed by the Commissioner of Internal Revenue on May 27, 1921. Such tax was paid in full by plaintiff. Payments to apply were made on different dates.
On May 19, 1927, final payment of $9,093.58 principal, and $1,955.12 interest, together aggregating $11,048.70, was made. Accompanying this payment was a notice that it was made "under protest and under duress of the distraint and seizure of property" upon the ground that "(1) The amount of tax for which its property had been levied upon and seized is not due but has been fully paid and settled. (2) More than five years have elapsed since the filing of the income and profits tax return of Pratt & Letchworth Company for the year 1920 and no suit or proceedings for the collection of any such tax may lawfully be begun after the expiration of five years after the date when such return was filed." On January 26, 1931, plaintiff filed its claim for a refund of the aforesaid $11,048.70, claiming that it was paid "under protest and under duress of a warrant of distraint more than six years after assessment was made by the Commissioner of Internal Revenue." (My italics.)
The Revenue Act of 1926, § 278 (d), 44 Stat. 59 (26 USCA § 1061 and note), provides that: "Where the assessment of any income, excess-profits, or war-profits tax imposed by this title * * * (whether before or after the enactment of this Act) within the statutory period of limitation properly applicable thereto, such tax may be collected by distraint or by a proceeding in court * * *, but only if begun (1) within six years after the assessment of the tax. * * *" (My italics.)
Under the Revenue Act of 1921, chapter 136, title 2, Income Tax, 42 Stat. 227, 265, § 250 (d), suit or proceeding to collect the tax in question was required to be begun within five years after the date when the return was filed. The Revenue Act of 1924, § 278 (d), 26 USCA § 1061 note, extended such period of limitation to six years after the assessment, but it was held in Russell v. U.S., 278 U.S. 181, 49 S. Ct. 121, 73 L. Ed. 255, that this act did not extend the time where the assessment had been made prior to June 2, 1924. It will be noted that the act of 1926 is expressly made applicable to assessments made before the enactment of the act. It would appear that the amendment in this respect was made because of the decision in Russell v. U.S., supra. The statute of limitations did not run until May 27, 1927, and final payment of the tax was made prior to that date. Florsheim Bros. Drygoods Co., Ltd. v. U.S., 280 U.S. 453, 50 S. Ct. 215, 74 L. Ed. 542; Russell v. U.S., supra; Northwestern Barb Wire Co. v. U.S. (Ct. Cl.) 42 F.2d 579.
It will be noted that by section 250 (d) of the Revenue Act of 1921 the statute makes the date of filing the return the date when the statute of limitations begins to run, and that in both the act of 1924 and 1926, the statute begins to run from the date of the assessment. Plaintiff's claim for refund, as noted, alleges payment of the tax more than six years after the assessment, and it does not seem to question the effect of the retroactive provision of the act of 1926. Such retroactive provision is constitutional. Bessemer C. & C. Co. v. Heiner (D.C.) 39 F.2d 492; Campbell v. Holt, 115 U.S. 620, 6 S. Ct. 209, 29 L. Ed. 483.
Some confusion arises in the case by reason of the imposition of a deficiency tax for 1920. The bureau of Internal Revenue fixed such deficiency tax at $92,760.96. On appeal to the Board of Tax Appeals (see U.S. Board of Tax Appeals, vol. 7, p. 492), the basis of assessment was modified, and following the decision, the deficiency tax was subsequently fixed at $61,646.85. This tax, with interest of $9,242.80, was paid by plaintiff. In arriving at the deficiency tax, among the credits for overpayment were amounts of $9,455.46 and $1,853.67. While these amounts approximate the amount paid on May 19, 1927, it does not appear that it is a deduction of the particular tax for which $11,048.70 was paid. It makes no difference whether these represent the same items, and plaintiff, having been allowed these amounts in the computation of the deficiency tax, would be entitled to no refund on account of them. The total tax paid by plaintiff for the year 1920 was $146,765.81. That amount was arrived at after allowing overpayments aggregating $28,609.20 and deducting from a total of $175,375.01.
It thus appears that the correct amount of the tax has been paid and plaintiff is now entitled to no refund.
I accordingly find and decide:
1. That the aforesaid tax of $11,048.70 was collected within six years from the date that such tax was assessed.
2. That the plaintiff is entitled to no refund on account of the payment of the aforesaid sum of $11,048.70.
3. That the complaint be dismissed, with costs.
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