The opinion of the court was delivered by: LEVET
This is a tax refund suit in which the plaintiffs, as administrators of the estate of Anna Whellan, deceased, seek to obtain a refund of $ 86,004.16 collected from plaintiffs by defendant, District Director of Internal Revenue, as interest upon Anna Whellan's liability as transferee of assets of Meyer L. Whellan, her husband, also deceased, and of Whellkin Coat Co., Inc., through her husband. The defendant moved for judgment on the pleadings, pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, 28 U.S.C.A. The plaintiffs filed a cross-motion for summary judgment.
The facts are as follows:
1. Plaintiffs allege that on or about March 14, 1958, the Director of Internal Revenue levied an assessment against the estate of Anna Whellan, deceased, in the amount of $ 53,940.25 tax, plus $ 26,970.12 penalty, or a total of $ 80,910.37, representing the liability of Anna Whellan, deceased, as a transferee of assets of Meyer L. Whellan, deceased, for income tax and penalty due from Meyer L. Whellan for the taxable years 1942, 1943 and 1944 (Complaint, paragraph Fourth).
2. Plaintiffs further allege that on or about March 14, 1958, an assessment was levied against the estate of Anna Whellan in the amount of $ 53,940.24 tax, plus $ 26,970.12 penalty, or a total of $ 80,910.36, representing the liability of the estate of Anna Whellan as a transferee of assets of Meyer L. Whellan, transferee of assets of Whellkin Coat Co., Inc., for unpaid deficiencies in income, declared value excess profits, and excess profits taxes and penalty due from said Whellkin Coat Co., Inc. for the taxable years of 1942, 1943 and 1944 (Complaint, paragraph Fifth).
3. The complaint also states that on or about March 14, 1958, the defendant demanded payment of said assessments with interest thereon computed from January 15, 1945 to January 19, 1958, amounting to a total of $ 84,217.71 for interest (Complaint, paragraph Sixth).
4. The plaintiffs paid the District Director the sum of $ 161,820.73 for the two assessments of taxes and penalties (Complaint, paragraph Seventh).
5. On or about April 23, 1958, plaintiffs paid $ 7,475.77 to the District Director on account of the interest assessment and thereafter on or about August 18, 1958 the plaintiffs paid him $ 78,528.49, representing the balance of the interest claimed to be due plus additional interest, making total interest payments of $ 86,004.26 (Complaint, paragraph Eighth).
6. Plaintiffs filed a claim with defendant for the refund of the interest (Exhibit A Complaint) stating as the reason therefor:
'The taxpayer, a transferee of Assets, was not liable for interest upon the value of the transferred assets for the Period during which she held the assets where the value of the assets was less than the tax liability of the transferors. Authority W. B. Voss and Sarah L. Voss, v. Earl R. Wiseman, District Director (U.S. Court of Appeals, Tenth Circuit No. 5271, May 10, 1956)'
By letter dated November 26, 1958, defendant notified plaintiffs of the rejection of their claim for refund of interest (Exhibit B, Complaint) stating:
'We refer to your claim for refund of interest in the amount of $ 86,004.26 for the fiscal years October 31, 1943 and October 31, 1944 filed in behalf of the Estate of Anna Whellan.
'In the reasons under Item 9 on the Form 843 reference is made to a decision in the case of W. B. Voss and Sarah L. Voss V. Earl R. Wiseman, U.S. Court of Appeals Tenth Circuit, Number 5271, March Term 1956, May 10, 1956 in favor of the taxpayer.
'The records in this office reveal that the aforementioned decision has not affected the method of computing interest on transferee assessments. Interest is still computed in accordance with established procedure.
'In view of the foregoing your claim for refund is hereby rejected.'
7. While denying knowledge or information sufficient to form a belief of the several amounts which were assessed as to tax, penalty and interest, the defendant admits the payments by plaintiffs of the sum of $ 161,820.7o for taxes and penalties under two transferee liability assessments and the sum of $ 86,004.26 for interest payments upon these two assessments.
8. Paragraph Ninth of the complaint alleges:
'The total amount received by plaintiffs' intestate, Anna Whellan, deceased, from Meyer Whellan and/or Whellkin Coat Co., Inc. for which she and her estate may be liable as a transferee as aforesaid, was less than the tax liabilities of said transferors and did not exceed $ 161,820.73, the amount of said assessments for taxes and penalty, without interest, which has been paid in full by the plaintiffs to the defendant, the District Director of Internal Revenue, and the plaintiffs have thereby fully discharged their liability and the ...