Court Opinion

ID: 9637849
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:23:47.157339+00
Date Added: 2024-06-11T18:10:01.108803
License: Public Domain

SANBORN, District Judge
(dissenting). My first impressions of this ease were the same as are expressed in the majority opinion. However, upon a final analysis I have reached the conclusion that the agreement of compromise, which is the only defense which the government has against the recovery of the tax, included only the claim for penalty, and excluded the tax. No dispute existed between the parties as to the amount of the tax, the sole dispute being as to the amount of penalty, the government claiming that the return of the dry goods company was fraudulent, and the company claiming that it was not. The company offered $32,003.12 in compromise of the claim for the penalty, and stated that it would pay the tax. The Commissioner accepted the $32,003.12 “as a compromise of liabilities on account of your alleged filing of a false and fraudulent return.” A cheek was given for the tax, and a separate cheek for the penalty, and separate receipts were issued. My conclusion is that no agreement of settlement was made as to the tax; that the - government was free to collect a greater amount of taxes if, under the law, a greater amount was actually due; and that the taxpayer lost no rights to recover all or any part of the tax illegally assessed. The fact that the law provided that this penalty “shall be added as a part of the tax” does not, in my opinion, change its character as a penalty (see 17 Op. Attys. Gen. 433; Thome v. Lynch [D. C.] 269 F. 995, 1001; Lipke v. Lederer, 259 U. S. 557, 561, 42 S. Ct. 549, 66 L. Ed. 1061; Helwig v. United States, 188 U. S. 605, 611, 23 S. Ct. 427, 47 L. Ed. 614), or make a compromise of the penalty a compromise of the tax,, in the absence of evidence that such was the understanding and agreement of the parties. I think the decree should be reversed. -