Court Opinion

ID: 6849336
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:33:45.62946+00
Date Added: 2024-06-11T16:05:02.527478
License: Public Domain

LITTLETON, Judge
(concurring).
Much of the argument in defendant’s brief on the motion for reconsideration of the demurrer is based upon what is claimed to have been Bureau practice and on what took place in the House and Senate with reference to certain bills.
I agree with the foregoing opinion, but a word might be said with reference to what occurred in Congress and also with reference to the Bureau of Internal Revenue rulings.
Extemporaneous answers to questions propounded in rapid-fire debate in Congress are of little weight, if any, in determining the construction of statutes, but, even if they should be so treated, the quotations which are made from the debates in Congress do not in any way help the defendant’s case. The debate which took place in the House, and from which quotations are made in the arguments both for plaintiff and for the defendant, was with reference to a bill separate from the general revenue acts and which amended section 252 of the Revenue Act of 1921 with reference to certain matters which have no bearing on the case now before the court. This is shown by the letter of the Secretary of the Treasury showing the purpose of the bill submitted to the House in connection therewith. The discussion was with reference to the meaning of this particular bill and not with reference to the provisions which are now under consideration, and is therefore of no assistance in determining the meaning of these provisions. What took place in the Senate on the discussion of the amendment inserted in the 1924 act with reference to the time of payment of a portion of the tax seems to support the contention of the plaintiff rather than that of the defendant. The report of the Senate committee shows that the provision with reference to the payment of a portion of the tax was inserted “in order that a late payment of a small portion of the tax may not extend the time for filing a claim for refund of the entire tax.” This means that, in the absence of this provision, a late payment would have such an effect. It is urged that in commenting on this provision Senator Smoot stated that it only carried into effect what had been the prior action of the Bureau. If the statement of Senator Smoot had reference to section 281 (b) (26 USCA § 1065 note) rather than section 281 (a), which appears to have been under consideration at that time,, there were never any published regulations to that effect prior to the Revenue Act of 1924. It has often been held that, where the Bureau’s practice with reference to an ambiguous statute is long continued and Congress takes no action to modify or change it, the fact that Congress does not see fit to act under the circumstances is evidence that the Bureau’s action expressed the intention of Congress. But it has not been held that, where Congress found that the Bureau of Internal Revenue had been acting without authority of law and concluded to give it such authority in the future as it had been exercising in the past, the action of Congress tended in any way to ratify the illegal acts.
Subdivision (b) of section 281 is, by its terms, specifically limited to income, war profits, or excess profits taxes specified in subdivision (a). The Commissioner of Internal Revenue may have taken the position in certain eases that the refund should be limited to that portion of the tax paid within four years prior to the filing of claims which have never appeared in any published reports, and it is possible that the officials of the Treasury Department who called the *1006attention of the Congress to the need for the amendment contained in section 281 of the 1924 act stated that the proposed amendment was the same as the regulations in force. "Nevertheless, the fact that the chairman of the Senate Finance Committee stated on the floor of the Senate, “This subdivision has been written to limit the amount of refunds and credits to the portion of the tax paid within the four years preceding the filing of the claim, in order that the taxpayer- may not, by a small payment, reopen the entire ease,” and the fact' that the report of the Finance Committee on section 281 (b), No. 388, page 33, Sixty-Eighth Congress, first session, stated that the statute had been amended “in order that a late payment of a small portion of the tax due may not extend the time for filing a claim for refund of the entire tax,” show that it was recognized that any such departmental interpretation of the statute was erroneous and without support in law. This is shown by the statements contained in Solicitor’s Memorandum 3380, IY-1 C. B. 80.
There were no published regulations prior to the enactment of the Revenue Act of 1924 which provided that the amount of the refund should not exceed the portion of the tax paid within the two or four year period, as the case might be, prior to the filing of a claim for refund. The only published ruling whieh gives any indication that such a construction might be placed upon the refund statute is L. O. 1116, III-l C. B. 350, where, under the Revenue Act of 1921, the opinion was expressed that a claim for the refund of federal estate taxes might be allowed since the amount paid within four years prior to the filing of a claim did not exceed the amount claimed. It was not necessary in that ruling to pass upon a case where the refund sought was of an amount greater than the amount paid within the four-year period. The correct rule in such a situation is set out in S. M. 3380, supra, which refers to L. O. 1116, supra, and holds that in such a ease the statute would not begin to run until the last payment, regardless of whether that payment was greater or less than the amount claimed.
Solicitor’s Opinion 833, 1 C. B. 249-, cited by the defendant, simply holds that section 252 of the Revenue Act of 1918 does not take away the rights of the taxpayer under section 3228 of the Revised Statutes to file a claim for refund within two years after the cause of action accrued, or the date of the payment of the tax under protest. T. D. 3416, 1-2 C. B. 228, likewise states the requirement that claims for refund must he presented to the Commissioner within four years after the payment of the tax, but does not limit the refund to the portion paid within the four-year period. In I. T. 1269, 1-1 C. B. 311, it is held .that a claim for the refund of income taxes imposed by the Revenue Act of 1913 was barred by section 3228 of the Revised Statutes because it was not filed until more than two years had elapsed after the payment of both the original and the additional tax, thus apparently recognizing that, if the refund claim had been filed within two years after the payment of the additional tax, the claim would not have been barred. T. D. 3457, II-l C. B. 177, states only that after the amendment of líareh 4, 1923 (42 Stat. 1504), a claim for the refund of income, war profits, and excess profits taxes may be allowed where the claim is filed before the expiration of two years from the time the tax was paid. T. D. 3462, II-l C. B. 180, likewise fails to limit the refund in any way to the amount paid within two years prior to the filing of the claim.
Article 1307 of Regulations 65, under the Revenue Act of 1924, provides that the refund is limited to the portion of the tax paid within four years prior to the filing of the claim for refund, and this is the first issued regulation whieh so limits the refund of any internal revenue taxes. Article 1308 of Regulations 65, which refers to refunds under prior acts, does not so limit the claim. This, it seems, is due to the express language of section 281 (f) of the 1924 (26 USCA § 1065 note) act, whieh provides that section 281 shall not bar from allowance a claim for credit or refund filed prior to the act which, but for such enactment, would have been allowable, thus showing the recognition by Congress and by the Treasury Department that prior to the 1924 act the refund w'as not limited to the portion of the tax paid within the two or four year period prior to: the filing of the claim for refund.
The regulations prior to the 1924 act do not support the position taken that the Commissioner of Internal Revenue interpreted the prior acts to mean that refunds were limited to the portion of the tax paid within the two or four year period prior to the filing of the claim.
The rulings and regulations cited do not show, as contended by counsel for the defendant, “a consistently followed recognition by the Commissioner of Internal Revenue that his authority to refund all internal-revenue taxes, including estate taxes, was under R. *1007S. 3220 and 3228, both prior and subsequent to the .1921 amendment of the latter, limited in amount to a sum not to exceed the tax or portion of total tax paid within two and four years, respectively, immediately preceding the filing of a claim therefor, i. e., that a refund claim was allowable only if and when filed within two and four years, respectively, of the payment of the particular tax or portion thereof sought to be recovered.” And S. M. 3380, supra, obviously is not susceptible of that interpretation.
BOOTH, Chief Justice, and WILLIAMS, Judge, concur in the foregoing opinions.
WHALEY, Judge, took no part in the decision of this case on account of illness.