#### GEORGE W. JOHNSON v. THE UNITED STATES

[No. K-515.

Decided November 14, 1932]

*Messrs. Edward Tl. Green*and *Lawrence A. Raker*for the plaintiff. *Mr. Henry Ravenel*was on the brief.

*Mr. Assistant Attorney General Charles B. Rugg*for the defendant. *Mr. Charles R. Pollard*was on the brief.

*365Littleton, *Judge,*

delivered the opinion of the court:

The question presented in this case is whether plaintiff is «entitled to maintain this suit to recover an overpayment of :$5,969.56 for 1917 under a claim for refund filed June 12, 1924, and whether a claimed amendment of the aforesaid ■ claim for refund made November 14, 1928, had the effect of making the previous claim, if insufficient, valid for the purpose of suit.

So far as material to a decision of the question presented, ‘the facts in substance are that the partnership of Endicott, ■Johnson & Company, of which plaintiff was a member, filed •a partnership return for 1917 disclosing an income upon which the partnership paid an excess-profits tax of $1,413-t'028.55, a portion of which was refunded.

In March, 1918, plaintiff filed his individual income-tax •return for 1917 showing a tax of $35,245.12, which he paid. Tn this return he did not take a deduction from his distributive share of the partnership net income of his proportionate share of the excess-profits tax paid by the partnership on its return for 1917.

At that time and continuously until February 4,1927, when the Treasury Department promulgated Treasury Decision • 3971 containing the decision of the Circuit Court of Appeals for the Second Circuit in *Reid*v. *Rafferty,*the Commissioner had held that the excess-profits tax paid by a partnership for 1917 should be deducted from the partnership’s gross income in determining the distribution to be shown in the •partners’ individual returns. But after making the distribution of the income from the remaining balance on the •partnership return to the individual's no further credit was allowed to the individual for his pro rata share of the ■«excess-profits tax paid by the partnership. This practice *366was changed in 1927 and the overpayment which is sought to be recovered in this suit results from a credit against plaintiff’s distributive share of the net income of the partnership of his pro rata share of the excess-profits tax paid by the partnership for 1917.

In 1921 the Commissioner caused an examination to be made of the books and records of the partnership, and in March 1923 he made a jeopardy assessment of an additional tax against the partnership for 1917. In February 1922 the partnership requested a conference with the Commissioner for the purpose of presenting reasons and evidence in opposition to a proposed assessment against the partnership^ and thereafter numerous conferences in connection with the partnership tax, and, also, in connection with that of the plaintiff, were held in 1923, 1924, and 1925, and briefs, appeals, and evidence were filed with the Commissioner. In March 1923 plaintiff filed with the Commissioner a verified appeal from the proposed additional assessment against him resulting from the increase in his distributive share of the net income of the partnership resulting from the increase in the partnership income upon which the additional tax had been assessed against the partnership earlier iñ that month. June 12,1924, plaintiff filed a claim for refund of $35,245.12 for 1917. Under certain waivers which had been executed by him, this claim was timely. The appeal that had been filed by plaintiff with the Commissioner was made a part of this claim as to the facts and the grounds upon which said claim was based. The appeal related to the consolidation of the partnership with certain corporations and questioned the proposed additional assessment against him as a result of the disallowance of items of expense which were proposed to be capitalized or disallowed completely by the Commissioner, and other questions were raised as to the valuation of items for the purpose of invested capital.

The question whether the plaintiff was entitled to take a credit against his distributive share of the net income of the partnership of his pro rata share of the excess-profits tax paid by the partnership was not mentioned in the appeal which was made the basis of the claim for refund, nor was. *367this matter ever thereafter drawn into question or urged before the Commissioner by the plaintiff until November 14,1928, almost a year after the Commissioner, on December 16,1927, had rejected the claim filed June 12,1924. In these circumstances, the claim first filed cannot form the basis of this suit to recover the overpayment of $5,969.56 resulting entirely from crediting against plaintiff’s distributive share of the net income of the partnership of his pro rata share of the excess-profits tax collected from the partnership for 1917. *United States*v. *Felt & Tarrant Mfg.*Co., 283 U.S. 269; *Electric Power & Light Corp.*v. *United*States, *post,*p. 379. The attempted amendment of the claim for refund on November 14,1928, was without effect. *Sugar Land Railway Co.*v. *United States,*71 C.Cls. 628, 48 Fed. (2d) 973. *Mutual Life Insurance Co.*v. *United*States, 72 C.Cls. 204, 49 Fed. (2d) 662.

It is insisted, however, by the plaintiff that the Commissioner had before him all the facts that could be furnished with reference to the net income of the partnership and the plaintiff’s distributive share thereof for 1917, and that all the facts necessary to a proper computation of plaintiff’s tax were, therefore, adequately known to the Commissioner prior to and at the time of the filing of plaintiff’s claim on June 12, 1924; that the facts set forth by plaintiff in his appeal to the Commissioner^ in protest of the proposed additional assessment against him for 1917, by reason of an increase in the net income of the partnership, were adequate to show said net income and plaintiff’s distributive share thereof and that his failure to point out to the Commissioner in the claim that, as a matter of law, he should credit a portion of the excess-profits tax paid by the partnership-against the distributive share of the partners was not vital to the adequacy of the claim under section 3226, Revised Statutes; that, even if the facts upon which the right of' plaintiff to recover the admitted overpayment were omitted in the claim, this would not prejudice the Commissioner nor prevent him from making a determination of the amount of the overpayment from the facts otherwise in his knowledge *368and possession. We cannot agree with this contention. Before a suit can be maintained to recover an overpayment of tax, it must be shown that the nature of the items made the basis of the suit was brought to the attention of the Commissioner in connection with plaintiff’s claim for a refund. *Mutual Life Insurance Co.*v. *United States, supra. Lancaster Cotton Mills*v. *United States,*75 C.Cls. 105; *Electric Power & Light Corp.*v. *United States, supra.*

The petition must be dismissed. It is so ordered.

Whaley, *Judges*Williams, *Judge;*GREEN, *Judge;*and Booth, *Chief Justice,*concur.

ON MOTION EOR A NEW TRIAL

Littleton, *Judge,*

delivered the opinion of the court:

Plaintiff filed a motion for a new trial on the ground that the court erred in holding that he could not recover for the reason that he did not include in his claim for refund the facts or a claim for a deduction from his distributive share of the net income of the partnership his pro rata share of the excess-profits tax paid by the partnership for 1917.

It is not claimed that this matter was brought to the attention of the Commissioner of Internal Revenue in the claim of June 12, 1924, but it is insisted that the facts necessary to enable the Commissioner to have made this deduction were before him at the time* of his final decision of the case because of a report of a revenue agent and the Commissioner’s determination of the net income and tax liability of the partnership.

As shown in the findings and in the opinion heretofore rendered, the first claim for refund of June 12, 1924, which was timely, did not bring the matter of the deduction from plaintiff’s net income of his pro rata share of the excess-profits tax of the partnership to the attention of the Commissioner, and no amendment to this claim was made before it was formally rejected by the Commissioner December 16, 1927. The claim thereafter filed on November 14, 1928, *369raising for the first time this question, was filed almost a year after the first claim had been rejected and it cannot be treated as an amendment. Inasmuch as it was filed after the expiration of the time allowed for filing claims it cannot form the basis for a suit. In *Factors & Finance Co.*v. *United States,*73 C.Cls. 707, 56 Fed. (2d) 902, affirmed 288 U.S. 89; *Memphis Cotton Oil Co.*v. *United*States, 75 C.Cls. 195, 59 Fed. (2d) 276, affirmed 288 U.S. 62; *Bemis Brothers Bag Co.*v. *United States,*289 U.S. 28, and *Electric Power & Light Corp.*v. *United States, post,*p. 379, we held that a suit may not be maintained to recover an overpayment when the ground therefor was not included in a claim for refund made the basis of such suit and that the fact' that the Commissioner may have had in his possession facts other than those stated in the claim upon which he might have allowed an overpayment would not support a suit in this court.

In the case of *Factors & Finance Co.*v. *United States, supra,*and *Memphis Cotton Oil Co.*v. *United States, supra,*the taxpayers amended their claim to raise the question relied upon in the suits before the original claims had been finally decided by the Commissioner, and in *Bemis Brothers-Bag Co.*v. *United States, supra,*the taxpayer included in its. claim the ground afterwards made the basis of the suit as an alternative claim which the Commissioner in his decision did not pass upon, and the matter was again brought to his attention in an amended and supplemental claim. These cases are not, therefore, authority for the position taken by the plaintiff in this case.

We find no error in the original decision dismissing the petition and the motion for a new trial is overruled. It is so ordered.

Whalex, *Judge;*Williams, *Judge;*and Geeen, *Judger concwr.*

Booth, *Ohief Justice,*took no part in this decision on motion for new trial on account of illness.