Court Opinion

ID: 8705251
Source: CourtListenerOpinion
Date Created: 2022-11-26 06:15:44.811914+00
Date Added: 2024-06-11T16:58:01.174523
License: Public Domain

SYMES, District Judge
(concurring specially) .
I agree with my colleagues in the result reached in this case, but cannot concur in certain statements of legal principles contained in.the findings filed.
My first objection is that the findings are altogether too long and voluminous and, as Judge Sanborn states in Brown Paper Mill Co. v. Irvin, 8 Cir., 134 F.2d 337, at page 338:
“Findings of fact should be ‘a clear and concise statement of the ultimate facts, and not a statement, report, or recapitulation of evidence from which such facts may be found or inferred.’ ”
Further, they should-be concisely stated, non-argumentative in form, free from conclusions of law, and from the redundancy so frequently found in pleadings.
Next, I cannot concur in certain statements of legal principle contained in conclusions, of law 5 and 6.
I do not believe that “at all times after December 31, 1942, the United States was a creditor of said Railway Company for ■whatever income taxes and excess profits taxes, if any, would become due from or be payable by said Railway Company * * * for the year 1942”;- or that “the claim, if any, of 'the United States- for such 1942 taxes was then [i. e., on December 31, 1942] a provable claim”; or that “said decree of March 8, 1943, and the Findings of Fact and Conclusions of Law on which the -same was based, constitute an adjudication, binding on the United States, that no taxes were due or payable to the United States from said Railway Company * * * for the year 1942.”
My disagreement is solely a difference as to the date upon which the United States became foreclosed from filing a claim for the 1942 taxes. I do not believe that that date was December 31, 1942, or March 8, 1943; •or any other date prior to March 15, 1943, when the petitioner admittedly filed its 1942 income tax and excess profits tax returns.
Section 738 of the McLaughlin Act provided that the order of the special court approving the petition shall have the effect of an adjudication of bankruptcy for the purposes of § 274 of the Internal Revenue Code. The latter section in turn sets forth that upon the adjudication of bankruptcy of any taxpayer any deficiency determined by the Commissioner shall be “immediately assessed.”
A deficiency is defined in § 271 of the Act of May 28, 1938 (Revenue Act of 1938), and in the Internal Revenue Code of 1939, 53 Stat. 82, 26 U.S.C.A. § 271, which was in effect at the time the decree of March 8, 1943, was entered, as being “the amount by which the tax imposed by this title exceeds the amount shown as the tax by the taxpayer upon his return * * * ” [Emphasis supplied]
The language of 26 U.S.C.A. § 274, supra, presupposes that there must be a deficiency before an assessment can be made; and § 271, supra, requires that there be a return before there can be a deficiency. Therefore it follows inescapably that, in this case, the Commissioner’s duty to file an assessment of deficiency arose “immediately” after March 15, 1943, the date upon which •the petitioner filed its return,- and not “immediately” after any prior date.
While I recognize that the McLaughlin Act was remedial legislation and should be liberally construed, I do not believe that it was intended to rewrite the internal revenue laws and radically change the Commissioner’s duty regarding the collection of the public revenue. ,
Admittedly, the Act sought to expedite the assessment of tax deficiencies. I do not believe it was intended to give the Commissioner inquisitorial powers over a prospective taxpayer’s books, in advance- of the filing of the return. The processing of the tax, and the amount thereof, does not begin until the taxpayer files his return on March 15th. Before that date it is impossible for either party to determine the exact amount due from the books, because deductions, and other items of credit, are not then, accurately known, and any figures arrived at before March 15th would be inaccurate.
Finding of Fact No. 13 seems to hold that the Commissioner had both the power and the duty to exercise such inquisitorial functions vis-a-vis the .taxpayer’s books; for it specifically sets forth that all the “data,” etc., “necessary to be known for the com*149putation” of the 1942 taxes “were of record and ascertainable” in the office of the petitioner’s General Auditor, “and were there subject to inspection and examination by the United States at all times after January 25, 1943.”
Certainly the McLaughlin Act contained no provision specifically vesting the Commissioner of Internal Revenue or his agents with the power or the duty of thumbing over a prospective taxpayer’s records for any given year before that taxpayer had been given the opportunity of filing a return. I am not disposed to read into that Act — remedial though it may be — any such drastic departure from the genius of the internal revenue laws.