Court Opinion

ID: 6887402
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:32:19.907437+00
Date Added: 2024-06-11T16:05:45.117749
License: Public Domain

WALLER, Circuit Judge
(dissenting).
The second amendment to Henry M. Marx’s return, filed thirteen days after March 15, was accepted by the Collector, together with the additional tax due under the amended return. This procedure was in accord with an immemorial policy of the Department (in all situations except where the statute expressly provided otherwise) to permit a taxpayer to seasonably correct errors and oversights in his return. The right of a taxpayer to have his return speak the truth and accurately reflect his income is not only grounded in longstanding policy and precedent but in common honesty and good morals. In the absence of fraud, unreasonable delay, or positive statutory prohibition (such as in capital stock returns) the right to state the truth, if without malice, without giving information to the enemy, or without violating certain confidential relationships, is the prerogative of an American.
It is conceded: (a) That all the stockholders agreed to include in their individual returns their entire pro rata share of the adjusted and undistributed net income of the corporation; (b) that the corporation made a return on that basis; (c) that all stockholders, except Henry M. Marx, accurately and seasonably returned such income; (d) that Henry M. Marx filed an appropriate amendment on March 28; (e) that in April or May of the same year, Henry M. Marx received a request from the Collector of Internal Revenue for an additional surtax in the amount of $80.00 with respect to his amended return, which amount he paid. There was no fraud. There was • no intent to evade taxes, but simply a case of being too busy with the problems and perplexities of others to attend to his own.
Sec. 351(d) of the Revenue Act of 1934 does not condition the option upon the filing of a return on or before March 15, but “at the time of filing their returns”.
It is my view that an amendment to a return, seasonably filed, which is accepted and the tax demanded and collected thereon, becomes, and is, a part of the original return as fully as if the amendment had been initially included therein. Statutory penalties and interest perhaps could have been imposed under appropriate statutes, but the penalty cannot now be a refusal of the amended return which had been seasonably and honestly filed and accepted.
The Collectors of Internal Revenue are empowered to grant extensions of time to file tax returns under Sec. 53, Revenue Act of 1934. See 26 C.F.R. 2.32. The acceptance of the amendment and the collection of the tax thereunder by the Collector does not work an estoppel against the Government, but it was equivalent- to the granting, nunc pro tunc, of an extension of time for correcting the original return by the Collector.
The amendment in the present case was merely to correct an oversight, and the fact that it was requisite to a change in the corporation’s tax policy was purely incidental.
The case of Riley Inv. Co. v. Commissioner, 311 U.S. 55, 61 S.Ct. 95, 97; 85 L.Ed. 36, relied on by appellee and cited in the majority opinion, is not decisive. In that case the taxpayer was required to elect to take the percentage of depletion in its “first return”, which it did not do, and did not attempt to do until thirteen months after it had filed its first return. The Commissioner could not have granted an extension for filing a return in excess of six months, and in that case the Court expressly pointed out that it was “not dealing with an amendment designed merely to correct errors and miscalculations in the original return”. In the present case The Tax Court expressly stated that Henry M. Marx “was busy in professional work as a lawyer and neglected to take immediate steps to correct his mistake”. (Italics supplied.) It must be conceded that an extension of time for not to exceed six months could have *458been granted in this case, but such could not have been granted in the Riley case where the amendment was not tendered until thirteen months after the first return had been filed.
I dissent against the doing of an injustice which neither the facts, the statutes, nor impelling precedent makes mandatory upon tke Court.