Court Opinion

ID: 9640743
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:14:12.993048+00
Date Added: 2024-06-11T18:10:32.583535
License: Public Domain

SWAN, Circuit Judge
(dissenting). I recognize that the result of the majority opinion is probably a desirable one, and very likely one which the legislators would have provided for, had the specific matter been within their contemplation. But I find great difficulty in bringing the interest assessment within the language of their enact*791ment. Tax laws are to be strictly construed, and what is not expressed is not included. Gould v. Gould, 245 U. S. 151, 153, 38 S. Ct. 53, 62 L. Ed. 211.
The majority opinion seems to me to disregard the sentence: “If the amount already paid is less than that which should have been paid, the difference * * * (hereinafter called 'deficiency’) together with interest thereon * * * shall be paid upon notice and demand by the collector.” The amount “already paid” clearly seems to refer in point of time to the time when the Commissioner makes his examination, and the “deficiency” which bears interest is the difference between the principal sum which should have been paid and the amount already paid. It is implicit that deficiency and interest shall be demanded and paid together. The sum paid at the time of filing the amended return should, it seems to me, be included in figuring “the amount already paid” at the time of the Commissioner’s examination. Even though the statute is silent on the subject of amended returns, the practice of the department to- require amended returns in certain cases and to accept them to correct errors in any case has existed from the beginning. This is a reasonable practice and, in my opinion, is within the rule-making power of the Commissioner. I am unable to agree that payments made upon amended returns should be disregarded in figuring “the deficiency” which is to bear interest.
In exceptional circumstances, as in the case of railroads receiving federal control compensation from the government, a taxpayer whose books are kept upon an accrual basis may be absolutely unable to state his income accurately in his original return. An amended return and payment of the additional tax which it discloses is the best he can do. To require him' to pay interest on a sum which it was impossible for him to include in his original return is a harsh interpretation of the statute, and scarcely consonant with the theory of section 250 (e), being Comp. St. § 6336’4tt, that the taxpayer’s own computation is to fix the amount then payable and the instructions on the return are to be deemed a demand for its payment. Moreover, Congress has imposed no interest in cases where no return whatever is filed, and no penalty if the failure was excusable. R. S. 3176 (26 USCA §§• 97, 98; Comp. St. § 5899). It cannot be said, therefore, that, in every case where the proper tax was not paid on its due date, Congress intended interest to be charged.
It is said that the construction for which I have argued leaves the question of interest dependent upon a race between the Commissioner and taxpayer as to who shall first discover the mistake in the original return. This is true, and is perhaps indefensible as a policy of legislation, although it may be said to give the taxpayer an .incentive to correct mistakes voluntarily hy an amended return. But the question is not one of legislative policy, but of statutory construction. With much .diffidence and certain lingering doubts, I am compelled to differ with my colleagues’ interpretation of the statute.