Court Opinion

ID: 4475561
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:35.472708+00
Date Added: 2024-06-11T15:04:26.649746
License: Public Domain

Opper, 7., dissenting: Because I believe the conclusion that the Tax Court lacks jurisdiction to make a determination of the conceded overpayment disregards both express statutory direction and obvious legislative intent, I am forced to disagree with the present result. The statute is complicated and requires tracing through several sections; but when this is done, the conclusion that jurisdiction exists seems to me inescapable. We start with sections 728 and 729, in subchapter E which incorporates the excess profits tax provisions. They establish that “The terms used in this subchapter shall have the same meaning as when used in Chapter 1,” the income tax provisions, and that “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 tax imposed by this subchapter.” Jurisdiction to review denials of claims under section 722 is conferred by section 732. In this case petitioner filed the requisite petition for that purpose. Section 732 then directs “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 assessment and collection of taxes or the refund or credit of overpayments.” (Emphasis added.) It is evident, of course, that the denial of a claim for refund would not ordinarily conform with the determination of a deficiency under the income tax chapter as defined in section 271. But that difficulty is removed by the obviously purposeful provision of section 732 just quoted. And when this is so, that is when a deficiency has been determined, the Tax Court is expressly given jurisdiction, again under the income tax provisions, to find “that there is no deficiency and * * * that the taxpayer has made an overpayment of tax” and “to determine the amount of such overpayment.” Section 322 (d). It would thus seem as clear as need be from the plain import of the provisions of section 271, 322, 728, 729, and 732 read together that jurisdiction was expressly conferred to determine the very type of overpayment which this petitioner now claims. But as if to make the situation even less debatable, there was also enacted section 732 (b) which provides: (b) Deficiency Found by Board in Case of Claim. — If the Board finds that there is no overpayment of tax in respect of any taxable year in respect of which the Commissioner has disallowed, in whole or in part, a claim for refund described in subsection (a), and the Board further finds that there is a deficiency for such year, the Board shall have jurisdiction to determine the amount of such deficiency * * * There can be no reason for the addition of such a provision except to enable the consideration of the so-called “standard” issues arising under other provisions of subchapter E. No deficiency can exist in a section 722 situation since by definition that requires nothing but a claim for refund; and in passing it may be noted that section 710 (a) (5) permitting the withholding of a portion of the tax and its treatment as a deficiency had not been enacted when section 732 first became law. In order then to give section 732 (b) any meaning whatever as of the date of its enactment it must be taken as conferring on the Tax Court jurisdiction to consider standard issues under the excess profits tax subchapter generally once a petition has been filed with respect to a claim under section 722. There is no other situation to which it could apply. And if the Tax Court has jurisdiction to consider standard deficiency issues, it has under section 322 a corresponding jurisdiction to consider claims for overpayment likewise based upon the standard issues. All this would seem clear enough from the statutory provisions themselves. But even if the provisions were ambiguous, an examination of the legislative history would demonstrate that this result is required. The explanation accompanying section 732 is that “If such petition is filed such notice of disallowance is deemed to constitute a notice of deficiency for the purpose of assessment and collection of any deficiencies and the credit or refund of overpayments (including the suspension of the statute of limitations with respect thereto'). If such appeal is taken, then all pertinent issues hearing upon the tax liability under chapter 2E may ~be raised by the taxpayer and reviewed by the Board. If the Board does not find an overpayment but finds a deficiency in such cases, such deficiency may be assessed and collected, regardless of any statute of limitations otherwise applicable. If a claim for refund involving an issue of abnormality is disallowed in whole or in part, and the taxpayer does not wish to appeal to the Board, it still has the right to sue in the courts upon any issue raised in such claim except the issue with respect to abnormalities.” (Emphasis added.) H. Kept. 146,77th Cong., 1st Sess., 15; 1941-1 C. B. 560. It is thus apparent that even if the statute of limitations has run with respect to deficiencies or overpayments unconnected with abnormality questions, both the Commissioner and the taxpayer can raise them if jurisdiction has been obtained to review the treatment of the abnormalities, and that this desire to limit the effect of the statute of limitations was one of the purposes for which section 732 (b) was enacted. The present problem is not resolved by such cases as Uni-Term Stevedoring Co., 3 T. C. 917; Pioneer Parachute Co., 4 T. C. 27; Blum Folding Paper Box Co., 4 T. C. 795; and American Coast Line, Inc., 6 T. C. 67, affd. (CCA-2), 159 Fed. (2d) 665. There the question was whether the Commissioner’s issuance of a deficiency notice without passing on the claim for relief gave the Tax Court jurisdiction of the latter. Here the converse and entirely different question is whether denial of a section 722 claim gives the Tax Court the basis for jurisdiction of standard excess profits tax issues. It would be harsh enough if as in the present case the statute of limitations were intended to deny to a taxpayer the possibility of receiving a refund concededly due. But the statutory provisions, and especially the preoccupation of Congress with the very matter of the statute of limitations, makes it so clear that this was not intended that it seems to me all the more regrettable to deny our definitively conferred jurisdiction. JohnsoN and Raum, JJ., agree with this dissent.