Court Opinion

ID: 7220252
Source: CourtListenerOpinion
Date Created: 2022-07-25 03:47:44.92253+00
Date Added: 2024-06-11T16:17:12.522931
License: Public Domain

WIIALEY, Judge
(dissenting).
The Commissioner applied a live credit to a deficiency which was barred and rendered an account stated to the plaintiff showing a balance in his favor. With this account stated before it, and with full knowledge of all items which entered into it and that no interest had been allowed on the credit, the plaintiff accepted the payment of the balance. From then the statement became, not an account stated, but an account settled. The taxpayer knew when the statement was before it that a dead deficiency had been applied to a live credit, and it also knew that no interest had been allowed on the credit as provided by law. Nevertheless, plaintiff accepted the balance as payment. Later on the Commissioner, of his own volition, computed interest on the balance and sent the plaintiff a statement showing how and for what time i1 had been computed and a check for the amount. The plaintiff had ample opportunity to examine this statement of interest, and, as the Commissioner had opened the account settled, the plaintiff could have demanded the payment of the credit and the interest on the full amount of the credit from time of payment. But, with full knowledge of how both of these accounts *152had been made and with both before it, the taxpayer accepted the check for the interest. In so doing the taxpayer closed the door of opportunity to challenge the application of the credit to the dead deficiency and to any additional interest. In my judgment, the principle of account settled is plain. No fraud or gross error amounting to bad faith is alleged.
However, if the account settled can be opened to allow additional interest, then it loses its settled status and the credit should be allowed also. In my judgment, the original opinion was correct, and the motion for new trial should be overruled.