Court Opinion

ID: 7220946
Source: CourtListenerOpinion
Date Created: 2022-07-25 03:48:45.641316+00
Date Added: 2024-06-11T16:17:14.275251
License: Public Domain

LITTLETON, Judge
(dissenting).
I think this case is distinguishable from Standard Oil Co. of Indiana v. United States, 5 F.Supp. 976, 7 F.Supp. 301, 78 Ct.Cl. 714.
In the case at bar plaintiff paid to the collector the taxes for the years 1909 to 1919, inclusive, and specifically designated such payments as the taxes for those years. The collector advised the Commissioner thereof, and in due course the Commissioner made a formal assessment of the taxes, which assessment was transmitted to -the collector, who, in the usual manner, applied the payments as made to the taxes assessed for 1909 to 1919, inclusive. Within a short time the Commissioner signed a schedule of overassessment of $3,145,338.89 for 1918 and sent this schedule to the collector, with the usual instructions to abate such portion of the overassessment as had not been paid, to credit such portion thereof as might be found to be an overpayment to any outstanding taxes then due and unpaid, and to report what portion, if any, should be refunded, and disclose such action on a schedule of abatements, refunds, and credit.
At the same time this overassessment schedule was sent to the collector, the Commissioner disallowed a claim for abatement for an outstanding assessed and unpaid original tax for 1920, of which dis-allowance the collector was advised. Upon leceipt of .this overassessment schedule showing the overassessment for 1918, as above, the collector, in compliance with the instructions on the schedule, abated $1,777,-954.63 which had been assessed but not paid, and, of the balance, credited $1,207,-619.62 and $32,974.24 (the last amount being interest which had been assessed for 1918) to the unpaid tax due and assessed for 1920 and reported the balance of the 1918 overassessment of $126,790.40 as a refund due the plaintiff. The action of the collector was approved by the Commissioner, and subsequently the Commissioner in a letter to the collector advised him that no change should be made in the entries as made on his books, but that he (the Commissioner) would not pay interest in accordance therewith. Thereafter the Commissioner computed the interest as though the 1918 overpayment had been credited to the taxes assessed for 1909 to 1919, inclusive, when such was not the fact and as if the payments which had. theretofore been made by plaintiff for 1909 to 1919 and so applied by the collector had been paid and applied in satisfaction of the tax assessed and unpaid for 1920, which was also not the fact. After so computing the interest and preparing a Treasury check for $22,792.-12, interest resulting from such computation, together with the amount of $126,790.-40 shown as refundable, totaling $149,582.-52, the Commissioner prepared a certificate of overassessment for 1918 addressed to the plaintiff advising it of the total overassessment of $3,145,338.89 for that year and also advising it that of this overassessment $1,-777.954.63 had been abated, that $1,207,-619.62 of the remaining overassessment of tax and $32,974.24 (interest assessed for 1918) had been credited against the tax due and unpaid for 1920, and that the balance of the 1918 overassessment of $126,-790.40 was refunded. This statement of the account for 1918 and 1920 was delivered to the plaintiff June 1, 1928. In these circumstances I think the law directs how *455the interest shall be computed and is mandatory as to the amount to be paid.
Plaintiff claims that interest should have been computed and paid on the overpayment for 1918 credited to 1920 from the date of such overpayment to the due date of the 1920 tax. This claim of plaintiff is strictly in accordance with the credits as made and the notice and statement of account prepared by the Commissioner and delivered to the plaintiff. It is not important, I think, that plaintiff did not receive a formal notice from the collector or the Commissioner that the payments which it had made for the years 1909 to 1919 had been applied to the additional taxes assessed for those years. It was obvious, and plaintiff knew when it received the Commissioner’s final notice and advice that the 1918 overpayment had been credited to the 1920 tax, that the payments which it had previously made for the years 1909 to 1919 had satisfied the taxes for those years. The plaintiff had previously received notice of the assessment of taxes for 1909 to 1919, and was, of course, aware that it had already paid them. In these circumstances I am of opinion that plaintiff should have judgment for the full amount of the interest claimed, which is the interest directed to be paid by the statute on the credit as actually made.
WILLIAMS, Judge, concurs in this view.