The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1923-04-08
COVE EMINENT SEEK
COURT RULING ON
COLLECTING TAXES
May Allow Taxpayer Right to
Protest Taxes Before
Paying Them

WASHINGTON, April "A question
which threatens to revolutionize the
tax collecting methods of the coun-
try. according to the government,
soon may be decided by the supreme
court of the United States.
Involved is an ancient practice
which the federal government, until
recently, was always able to enforce
when it touched the pockets of its
citizens. This policy consisted of re-
curing the taxpayer to turn into the
custody of the United States treas
ury the tax assed against him, leav-
ing him, as an only recourse, its pay
ment under protest" and the initia-
ton of litigation to recover what he
contended had been Illegally collect
ed. The court Of last resort has been
called upon to determine whether
this time honored tax collecting
method shall continue to prevail, or
whether the taxpayer has the right
to withhold the payment of the tax
assessed until the soundness of the
governments demand can be deter
mined, by court procedure if neces-
sary.
No specific taxing statute is under
attack but the issue presented in the
controversy is whether any court can
restrain the collection Of federal
tax. Many objections have been urged
the taxes 1t assesses must be PAID.
leaving it's right to them to be tested
later. Aside from the disadvantages
which attach to suits against the
government, those who followed the
governments mandate and paid
taxes under protest found that
successful suits in the court OF
claims did not always result in the
prompt recovery of the money. At
I'D
must appropriate before any money
can be refunded. and experience has
demonstrated that congress cannot
be hurried in such matters. With
fair degree of good fortune the sue
cessful litigant could reasonably nope
that his posterity of the second or
third generation might obtain re-
fund of money illegally collected
from him.
Case OF Dupont.
When L. |. dupont de Nemours &
Company incorporated in Delaware,
it's stock was issued to those WHO mad
been financially interested in the
New Jersey corporation of the same
name The government took the po
sition that the stock of the Delaware
corporation so issued was taxable In
come and the supreme court so held
in the case of United States VS.. Phil
lis. An attempt had been made to
collect from Alfred F. DUPONT, one OF
the stockholders. an income tax Oh
S1.576.000 on the stock of the Della
ware corporation which he had re-
ceived Payment was delayed by MI.
dupont by a claim of abatement hled
with the commissioner OF internal
revenue When the supreme court
decision came in the Phillis case, the
commissioner promptly rejected MT.
duPont's claim, and insisted that the
tax be paid forthwith.
Instead Of complying and paying
Instead of complying ana paying
the tax under protest. Mr.. dufont
went into the United States District
Court for Della are and obtained
preliminary injunction restraining the
government from collecting the tax
by distraint. The Third Circuit court
OF Appeals considered the action OF
the district court good law and ar
firmed the decree. In view OIL the
Importance the government attaches
to an early decision, the supreme
Court has advanced the case for oral
argument April o. In insisting that
no court could legally restrain in the
collection of federal tax the gov
eminent declared that the interests
of Mr.. dupont were amply protected
and that he had not been deprived
of his remedy at law to recover any
taxes which were erroneousiy or IL
legally assessed and collected