Court Opinion

ID: 8594343
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:01:06.626017+00
Date Added: 2024-06-11T16:54:48.333505
License: Public Domain

Skelton, Judge,
concurring:
This case troubles me. The government has collected money from the plaintiff that plaintiff did not owe and to which the government is not entitled. It is understandable that the plaintiff feels that it is not right, just, nor equitable for the government to keep the money.
On the other hand, even though I sympathize with the plaintiff, I see no legal way it can recover the money. While it is true that the plaintiff could not during 1960-1967 foresee the decision in Motor Fuel Carriers, Inc. v. United States, 190 Ct. Cl. 385, 420 F. 2d 702 (1970), and cases following it *232to the effect that interest does not accrue on an accumulated earnings tax until the government serves notice that the tax is due, nevertheless, it could have taken the same position as the plaintiff did in that case and could have filed protective claims for the refund of the interest. When it did not do so within the statutory period of three years, its claim became barred by the statute of limitations, as stated in the court’s decision.
By hindsight, the plaintiff now realizes that by reason of our Motor Fuel Carriers decision, neither the accumulated earnings tax nor interest thereon was due until the government served the notice, although only interest was involved in that case. While the tax was owed in that case, it was not due until the notice was served. This necessarily follows, because if the tax had been due, interest would have accumulated and would have been due also. Under these circumstances, the plaintiff finds itself in a situation where neither the tax nor interest was due. Yet, the government collected interest that had neither accumulated nor was due and refuses to refund it. It is easy to understand why the plaintiff would feel that it is not right nor just for the government to keep the interest money under these circumstances. However, statutes of limitations are not based on fairness nor justice, but have as their purpose the prevention of litigation unless the interested party acts within the prescribed time. Many just and legal claims have been barred by the statute of limitations.
Here the plaintiff says in at least one place in its brief that the money involved here is not interest. However, the government assessed or demanded it as interest, the plaintiff paid it as interest, and the government received if and credited it as interest. Furthermore, in plaintiff’s petition, it refers to the payment as interest as follows:
2. Plaintiff brings this suit to recover from the United States interest payments erroneously assessed and collected.
The plaintiff refers to the payments as interest in several other places in its petition. There is no question but what both parties considered them as interest from the beginning. *233Consequently, even if not considered as a tax or penalty, the payments would be included in “any sum alleged to have been excessive or in any manner wrongfully collected,” within the meaning of 26 U.S.C. § 7422(a). This brings into play Section 6511 and Section 6601, which treats such interest as a part of the tax itself, as stated in the opinion of the court. This is also the holding of the Supreme Court in Flora v. United States, 362 U.S. 145 (1960). There the court said the term “any sum” includes interest.
Under these facts and the law, the plaintiff was required to file a claim for refund within three years as provided by 26 U.S.C. § 6511. Since it did not do so, its claim is barred by 26 U.S.C. § 7422(a). The six-year statute 'of limitations for the filing of suits in this court (28 U.S.C. §§ 2401 and 2405) is not applicable to this case.
To make my position clear, perhaps it should be said that, although I agree with the plaintiff that this decision appears to be unfair and unjust (as are many other decisions based on statutes of limitations), there is nothing that I or the other judges of the court can do about it. We, like the officers of the Internal Revenue Service, are required to follow the law, and that is what we have done here.
I concur in the opinion of the court.
Collins, Judge, joins in the foregoing concurring opinion.