6 F. Supp. 851 | Ct. Cl. | 1934
The Commissioner of Internal Revenue refunded to plaintiff in 1924 the' income taxes paid by her for 1919 after certain deficiencies for the years 1917 and 1918 were deducted and this suit is brought to recover interest on the amount so refunded, alleging an informal claim for refund was made by the plaintiff through certain correspondence filed with the Commissioner in the years 1921 and 1923. The refund having been made before the passage of the Revenue Act of 1924 (43 Stat. 253) and that act not being retroactive, United States v. Magnolia Petroleum Co., 276 U. S. 160, 48 S. Ct. 236, 72 L. Ed. 509, section 1324 (a) of the Revenue Act of 1921 (42 Stat. 227, 316) is the applicable statute.
This statute provides:
“That upon the allowance of a claim for the refund of or credit for internal revenue taxes paid, interest shall be allowed and paid upon the total amount of such refund or credit at the rate of one-half of 1 per centum per month to the date of such allowance, as follows: (1) if such amount was paid under a. specific protest setting forth in detail the. basis of and reasons for such protest, from the time when such tax was paid, or (2) if such amount was not paid under protest but pursuant to an additional assessment, from the time such additional assessment was paid,, or (3) if no protest was made and the tax was not paid pursuant to an additional assessment, from six months after the date of. filing of such claim for refund or credit. The-term 'additional assessment’ as used in this section means a further assessment- for a tax of the same character previously paid in part.”
The plaintiff had a gift made to her in 1917 of .325 shares of Ford Motor Company stock. In 1919' she sold this stock for $12,-
“It is the question of the loss sustained by me in the sale of this stock in July 1919; as compared with its fair market value when acquired by me, by gift, in January 1917.”
The plaintiff requested that.the 1919 income tax be audited for the purpose of having the value of the Ford stock in 1917 ascertained and furnished the Commissioner information as to its value which showed it exceeded the amount fixed by her in the 1919 return. She again asserts:
“I ask your kind consideration in regard to this item because, whereas I am taxed, as income, the amount of dividend received by me as the result of the Court decision- in the Dodge-Ford suit, this has not been offset in any way by the great' shrinkage in value in 1919; which was the direct result of this suit.”
The Commissioner, upon an audit of the plaintiff’s return, decided that the loss sustained by the plaintiff on the value of the stock when sold, more than oyefeame the proposed additional" tax and also resulted in the plaintiff not being liable for any tax in 1919. The amount paid by her for that year was accordingly returned to- her as an'overpayment after certain adjustments for previous years were made. This refund of the entire tax paid by the plaintiff in 1919 was due to the loss sustained by her on the sale of the stock.
The Commissioner duly paid the plaintiff the sum of $64,352.27. On April 25, 1928, a formal claim for refund of interest on the
The plaintiff contends that the letter of January 19, 1923, sworn to by the plaintiff, was sufficient compliance with the requirements of the statute to constitute an informal claim for refund to which the formal claim could be attached as an amendment.
Under the applicable provisions of section 1324 (a) of the Revenue Act of 1921, a claim for refund must be filed before interest can be allowed. The first intimation that the value of the stock received by the plaintiff as a gift in 1917 was in question, was raised by the Internal Revenue Bureau in a letter to the plaintiff. The entire correspondence with the Commissioner showed an endeavor on plaintiff’s part to avoid the payment of the proposed additional assessment caused by the additional dividend received by the plaintiff being placed in the year 1919, the year in which it was received, and not in the year 1917 as insisted upon by her and in which year she had placed it in her supplemental return for that year. The plaintiff’s whole object and aim were to avoid the payment of the additional tax caused by the receipt of this extra dividend. After exhausting all of the remedies provided by the bureau without success, and after the Commissioner had notified her of the additional tax for the year 1919, plaintiff then resorted to and claimed a loss on the sale of the stock and offered this alleged shrinkage in value as an offset or the equivalent of the amount of additional taxes which the Commissioner asserted was due. The evidence fails to show that at any time did the plaintiff expect to get a refund of taxes for 1919, but, on the contrary, it shows an effort on her part for a reduction or counterbalance of the proposed additional tax. There was never any assertion of a claim for refund or an intimation that, if the difference in values of the stock in 1917 and 1919' were taken into consideration, a shrinkage or loss would result in a refund to the plaintiff. This issue as to the value in 1917 was revived by plaintiff when all other efforts had failed to avoid the pay* ment of the additional tax caused by the inclusion of the additional dividend in the 1919 return. There is nothing in any of plaintiff’s letters whieh shows any basis on whieh she expected the return of any portion of the taxes.paid by her on her original return for"1919. In prder to constitute a claim for refund there must be brought to the attention of the Commissioner facts sufficient in themselves whieh, when followed by the Commissioner, would result in an excess payment by the taxpayer of taxes for the year in question. In other words, the taxpayer must take the initiative and supply facts to the Commissioner with the claim that, if these facts are taken into consideration, it will be found that the taxpayer has overpaid the amount of taxes properly due the government for the year in question.
This court in the ease of Lasher v. United States, 65 Ct. Cl. 295, upheld the plaintiff’s contention of an informal claim for refund but, in that ease, the letter on whieh the claim was founded set out the facts to the Commissioner on which he acted and claimed that if the facts were taken into consideration there would be an excess payment and there’fore a refund due to the plaintiff.
This was also true in the case of McKenny et al. v. United States, 49 F.(2d) 667, 52 F.(2d) 1063, 72 Ct. Cl. 195. In that case the plaintiff made an application for special assessment and stated in the application that, if it were granted, it would result in showing that the plaintiff had overpaid its tax.
The instant ease is more analogous to the ease of Philipsborn v. United States, 53 F.(2d) 133, 72 Ct. Cl. 545. In the latter case, as in this case, the plaintiff has attempted to amend by a formal claim for refund an alleged informal claim for refund. Without an informal claim, the formal claim is barred by the statute of limitations. We can find nothing in the record, either by inference or implication, which shows an assertion of a claim for refund of any part of plaintiff’s taxes for the year 1919 to which the formal claim for refund can attach.
The petition is dismissed. It is so ordered.