Court Opinion

ID: 4478647
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:12.883317+00
Date Added: 2024-06-11T14:53:56.102581
License: Public Domain

Opper, J., dissenting: It is, I hope, unnecessary to review the legislation presently involved and its history. See Mutual Lumber Co., 16 T.C. 370; H. Fendrich, Inc. v. Commissioner, (C.A. 7) 192 F. 2d 916; Commissioner v. Pittsburgh & Weirton Bus Co., (C.A. 4) 219 F. 2d 259, reversing 21 T.C. 888; Martin Weiner Corp. v. Commissioner, (C.A. 2) 223 F. 2d 444, reversing 21 T.C. 470; Packer Pub. Co. v. Commissioner, (C.A. 8) 211 F. 2d 612, reversing 17 T.C. 882; H. Fendrich, Inc. v. Commissioner, (C.A. 7) 242 F. 2d 803, reversing 25 T.C. 262; Willys-Overland Motors, Inc. v. Commissioner, (C.A. 6) 219 F. 2d 251. But I regret to say that in my view the present opinion appears to disi’egard both. Section 729(a), I.R.C. 1939, provides: All provisions of law * * * applicable in respect of the taxes imposed by Chapter 1, shall, insofar as not inconsistent with this subchapter, be applicable in respect of the [excess profits] tax imposed by this subchapter. Section 322(d), I.R.C. 1939, in chapter 1 states: If the Board finds that there is no deficiency and further finds that the taxpayer has made an overpayment of tax in respect of the taxable year in respect of which the Commissioner determined the deficiency, the Board shall have jurisdiction to determine the amount of such overpayment, and such amount shall, when the decision of the Board has become final, he credited or refunded to the taxpayer. [Emphasis added.] As my brother Murdock concludes in his concurring opinion, “the Tax Court * * * can find an overpayment if a proceeding is initiated on a determination by the Commissioner of a deficiency in that [excess profits] tax.” But by section 732(a), I.R.C. 1939, it is made clear that if a claim for refund under section 722 is disallowed, and if notice thereof is given to the taxpayer, he “may file a petition with the Board of Tax Appeals for a redetermination of the [excess profits] tax under this subchapter. If such petition is so filed, such notice of disallowance shall he deemed to he a notice of deficiency for all purposes relating to * * * the refund or credit of overpayments.” (Emphasis added.) It has never been assumed that a claim for refund is necessary for a determination by the Tax Court of an overpayment under such circumstances pursuant to the provisions of section 322(d); and in no case to which reference is made has it been so held. It seems to me to follow that not only does the Tax Court have jurisdiction of the issue in this proceeding, namely, the “redetermination of the [excess profits] tax under this subchapter,” but that, in fact, it is obliged to consider the question, and if there has been an overpayment, to make its determination accordingly. As to the existence of an overpayment, there is apparently no dispute between the parties so that the conclusion would seem to be necessary and obvious. The opinion scarcely even mentions section 322(d) and it is perhaps gratuitous to discuss the later provisions of that subsection here. But it may, nevertheless, be commented in passing that those provisions have always been considered to be a subject for decision under Rule 50 rather than in the opinion; that the petitioner has no burden here to show that part or all of the tax may be refundable under that subsection; that for all that appears, at least part of it and perhaps all of it is so refundable; and finally, that section 322(d) is administrative and refers to respondent’s legal authority to make the refund and concerns the Tax Court only to the extent that it is required “as part of its decision” to make findings with respect to the times when certain acts took place. (Emphasis added.) It is in my view especially unfortunate for the Tax Court to take the present position since in the only two circuits which have considered the question,1 the opposite conclusion has been reached. H. Fendrich, Inc. v. Commissioner, supra; Commissioner v. F. W. Poe Mfg. Co., (C.A. 4) 245 F. 2d 8, affirming on other grounds 25 T.C. 691. We are not presently concerned with the related question of whether it is left open to respondent to assert a deficiency on other grounds, see Commissioner v. S. Frieder & Sons Co., (C.A. 3) 247 F. 2d 834, affirming T.C. Memo. 1956-93, or whether that case can be reconciled with the second Fendrich case, and Commissioner v. F. W. Poe Mfg. Co., supra. But it may be observed that respondent has claimed an increased deficiency in income tax if we determine the excess profits tax question in petitioner’s favor; apparently thereby assuming that we have jurisdiction, see section 734,1.K.C. 1939, to impose even an income tax deficiency for the same year with respect to which an excess profits tax question remains open. While it is not clear from the opinion whether the question of jurisdiction has been considered, it seems evident that not only does jurisdiction exist under the present facts, Packer Pub. Co. v. Commissioner, supra, but also that the Tax Court is authorized and, in fact, required to determine whether there has been an overpayment, and if so, the amoimt thereof. I am forced to note my respectful dissent. Fisher, Pierce, MuleoNey, Forrester, Train, and Drennen, JJ., agree with this dissent.   This alone would be enough to justify renouncing the Tax Court’s Fendrich principle. Cf. Arthur L. Lawrence, 27 T.C. 713, reversed on other grounds (C.A. 9) 258 F. 2d 562, with Robert M. Dann, 30 T.C. 499, 510; Automobile Club of New York, Inc., first concurring opinion, 32 T.C. 906, 916.