Evening star., 1928-06-05
HIGH COURT DENIES
/ TAX CASE REVIEWS
Statute of Limitations In
voIved in Two Suits
for Recovery.

The Supreme Court yesterday refused
n grant reviews IN two tax cases.
The first was that of the Ellay Co.
Of New York proposing to determine ii.
after the passage of the 1926 act,
collector Of internal revenue may be
enjoined from collecting tax which
had been barred by the statute OF
limitations.
The second case raised the question
as to whether the Government may sue
To recover an amount enormously re-
funded by the Commissioner of Internal
Revenue, If. at the time the Govern
ment brought suit, the period of limita-
tions for collection of taxes had expired.
SI0,0eo Additional.
The Ellay Co. filed its income and
excess profits tax return. Within the
five-year period of limitations for the
assessment or collection of taxes, the
commissioner Of internal revenue as
SeSSe6 additional taxes amounting 10
over $4,000. The company filed a
claim for the abatement of the asses
ment. but the same was rejected After
the five-year period of limitations, the
collector attempted TO restrain the
conpany's account in the Fifth Avenue
Bank of New York, and the company
brought suit TO enjoin the restraint
proceedings.
Section 1924, Revised Statutes. pro-
vioes that no suit for the purpose OF
restraining an assessment or collection
of any tax shall be maintained IN any
court" The company maintained that
this provision does not apply TO suits
to restrain collections of taxes after the
period of limitations has run. because
the stands OF limitations in the revenue
act of 1926 operates to bar not only
the remedy but also the liability OF the
tax payer, and because ii further pro-
visies That no credit or refund IN re-
spect of such taxes shall be allowed un-
less the tax payer has overpaid the
tax" The company maintained, there
fore. that unless the restraint proceed
fnes are enioined. the collector VIII
have collected taxes which are no
longer due to the Government. and the
tax payer will have no remedy to re-
In New York and the second circuit de-
MED the injunctive relief.
Paid Ss,446.
The second case was that of Cynthia
r. Talcott, executrix VS.. United, states.
In 1920. the executrix. widow of
resident OF California, community
property State, fled an estate tax re-
turn and paid q tax Of $8,446 on 1t.
Later. the commissioner imposed an
additional tax exceeding $l,l03, which
was paid In 1925. the executrix filed
a claim for a refund of $7.552.82 upon
the theory that only One-hat OF the
value of the community property should
have been included in the gross estate.
The commissioner admitted the con-
tention of the executriX, but held that
the refund Of the entire amount, except
as 70 sl,l03, was barred By the statute
OF limitations He refunded this
amount 70 the executrix in 1926. Later
the Supreme Court held that the eS-
tate tax was measured by the entire
value of the community property. not
by one-haf Of it.
The executrix brought suit TO recover
the balance of her claim for a refund,
and the Government brought counter
claim TO recover the Sl.1O3 on the
ground that the same had been errone-
olsIy refunded out Of the Treasury.
The answer 70 the counter claim was
that this was q suit for the collection
Of a tax which had been barred by the
statute Of limitations. The Govern
uent maintained that its suit was not
for a tax. but for money paid out
through the mistake Of one Of its ON
GERS. and that the statute OF hmita-
tons did not apply. The DiSTlcL
Court and the Circuit Court OF Appeals
for the ninth circuit held in favor OF
the Government