Court Opinion

ID: 7220945
Source: CourtListenerOpinion
Date Created: 2022-07-25 03:48:45.639823+00
Date Added: 2024-06-11T16:17:14.273995
License: Public Domain

GREEN, Judge
(concurring).
The case appears to turn on the question of whether the Commissioner was bound by the entries made on the collector’s books.
In the case of the Standard Oil Co. of Indiana v. United States, to which reference is made in the foregoing opinion, this court’ cited with approval a line of cases holding in effect that, where there were several deficiencies in a taxpayer’s account, the Commissioner had the right to select the one upon which an overpayment should be applied, and held that the statute should not be so construed as to require the payment of interest to a taxpayer for a period during which he was in fact indebted to the government. But this is just what the plaintiff seeks to have done.
Counsel for plaintiff contend that, if the Commissioner had such a power, he exercised it when the entries were made upon the collector’s books and approved by the Commissioner in the schedule of refunds and credits, that these entries are final and conclusive, and that, when made, the Commissioner lost all control over the cáse except to carry these entries into effect. With this conclusion I do not agree. In the case of Oak Worsted Mills v. United States, 36 F.(2d) 529, 68 Ct.Cl. 539, it was contended by the plaintiff that the Commissioner, having determined its tax liability, was without authority to revise it, but, after a somewhat elaborate discussion of the question so raised, the court held in the supplemental opinion that, until the case was closed, the Commissioner could change any of his rulings and determinations. Of course, a case could be closed by the statute of limitations, by the acceptance of an account stated, or by final settlement in accordance with statutory provisions. But none of these matters appear here.
In my view, the books of the collector are kept merely for his own convenience and those dealing with him, including the government officials and the taxpayers. The collector cannot trust to recollection the condition of the many thousand tax cases of which he has charge, nor could he properly perform his duties unless he kept a record of the advice and information he received from the Commissioner in such form and with such indexes as would enable him upon a few moments’ notice to give out or himself make use of the information therein contained. It is now well settled that the Commissioner may change an assessment he,has made even after he has paid a refund. If his action in paying a refund was mistaken and erroneous, a suit may be maintained within the period of limitations to recover it, and, if he can do all of these things notwithstanding thé entries on the collector’s books and the approval of a schedule of refunds and credits, I can see no reason why any of such entries should be binding here.
The conclusions expressed above, if correct, dispose of the other contentions made by plaintiff. It is urged that there was nothing due on the taxes. for other years upon which the Commissioner finally applied the overpayment. But here again I. think nothing had been done which was conclusive against the defendant. The Commissioner could, as I think, rescind his approval of the schedule of refunds and credits and order the application of the payment in an altogether different manner as he subsequently did.
Nor do I think there was anything binding upon defendant in the certificate of overassessment (referred to in the dissenting opinion) which was delivered about *453June 1, 1928, to plaintiff, together with a check for what the Commissioner claimed was due. This original certificate of over-assessment was a schedule of refunds and credits and a statement of plaintiff’s tax account. It showed the total overassessment, the amount abated, the credit of $1,-207,619.62 of the remaining overassessment of tax and of $32,974.24 interest assessed for 1918 on the tax due and unpaid for 1920; also that there was $126,790.40 refunded together with interest in the amount of $22,792.12, making a total of $149,582.-52. (See finding XXIII.) A check for this total amount was transmitted with the certificate of overassessment. Just how or why the collector came to send to plaintiff this original certificate of overassessment which he must have known was incorrect does not appear from the testimony. Finding XXIII shows that in May, 1928, a new schedule of overassessments, abatements, and credits, called a supplemental schedule of overassessments, was prepared in which a different application was made of the overassessment and payment, and that it was in accordance with this schedule that the amount to be refunded plaintiff of $126,790.40 and $22,792.12 interest on the refund and credit was computed. The Commissioner signed this supplemental schedule May 26, 1928, and authorized the disbursing clerk of the Treasury to make payment accordingly. It may be that this supplemental schedule never went to the collector. But the collector received the original certificate of overassessment in 1926 and had advised the Commissioner that it was not correct in certain particulars. About August 29, 1927, the collector received a letter from the Commissioner in which he was advised that the application of the credit and payment would not be made in the manner stated in the original certificate of overassessment (see finding XXII) and thereafter the Commissioner computed the interest in accordance with this letter (see finding XXIII). This was nearly a year before the collector forwarded the original certificate (with some additional figures thereon) to the plaintiff together with a check for the refund. It would seem that by some singular mistake and inadvertence the collector overlooked the fact that the original certificate of overassessment had been entirely set aside. Whether the collector had received the supplemental schedule is, as I think, immaterial, but, in view of the advice he had received from the Commissioner, it is strange that he should have sent the original certificate to the plaintiff.
The Commissioner had the right to change and correct the original certificate by the supplemental certificate, and he even made a further correction in the original certificate, a-s shown by finding XXIV, by which $32,726.71, together with $3,718.-28 interest thereon, was refunded to plaintiff on September 19, 1928. The plaintiff received the payment under protest, claiming that it was entitled to a much larger sum and filed a claim for refund.
March 14, 1930, the Commissioner, after further consideration of plainliff’s return for 1920, approved another schedule of overassessments, as shown in finding XX VI, under which the plaintiff was shown to be entitled to a refund on taxes of 1920 of $922,137.66 and $195,467.92 interest, or a total of $1,117,605.58. A check for the total amount was forwarded to plaintiff, together with a certificate of overassessment and accompanying explanatory schedules.
Before this last schedule was prepared and on February 28, 1929, the plaintiff sent a demand to the Commissioner for the allowance of additional interest for the year 1918, and June 25, 1930, the plaintiff transmitted a further demand to the Commissioner with reference to the allowance of additional interest on the oyer payment for the year 1918 and a request for further allowance of interest upon the overpayment of taxes for 1920. September 5, 1930, the Commissioner made his last ruling, and took, so far as he was concerned, final action on plaintiff’s claim by refusing to compute, allow, or pay any further interest in addition to the amounts theretofore allo„wed and paid for the years 1918 and 1920.
It will thus be seen that plaintiff refused to accept, not only the statement o f account made in what is known as the original certificate of overasscssment, but all other statements rendered by the Commissioner as stated above; and, although it retained the checks received for interest, claimed that a much greater amount was due. Under these circumstances, I think it quite clear that the tax account between plaintiff and defendant, instead of being closed by the delivery of what is called the original certificate of overassessment, remained unsettled and various revisions were subsequently made by the Commissioner. If we were to consider merely the original certificate of overassessment, it will be observed *454that the plaintiff refused to accept it as correct, particularly objecting to the amount of interest allowed; and, - while the various items in this account cannot be reconciled, I do not think this authorizes the plaintiff to pick out one or more items thereof and say that those items are binding upon the opposite party but that none of the account, except what it selects, is binding upon itself.
No settlement at any time having been reached between plaintiff and defendant, the case has not been closed. In my opinion, it now comes before us to determine how much interest was in fact and law due the plaintiff. This, I think, has been correctly decided by the opinion of the CHIEF JUSTICE.
Attention is called to the fact that the entries upon the books of the collector still stand. Perhaps it would have been better to have had them corrected in accordance with the action -finally taken. The Commissioner considered he was not bound by the entries, and evidently thought it was not worth while to correct them. This was bad bookkeeping, but does not affect the decision. Between the Commissioner’s office and that of the collector, the plaintiff’s tax account was badly muddled, but this furnishes no reason why the plaintiff should be allowed interest for a period during which it was indebted to the government.
WHALEY, Judge, concurs in both of the foregoing opinions.