I. W. Thompson, Individually and Wife, Charlie Thompson v. United States

THOMPSON, Individuаlly wife, al., Appellants, et America, UNITED STATES of Appellee.

No. 20214. Appeals

United States Court of

Fifth Circuit.

May 27, 1964. Houston, Tex., ap- White,

A. A. pellants.

658 Atty. Oberdorfer, Gen., the Internal Asst. Revenue F. Louis Just, royalty Carolyn paid Jackson, Melva that R. Service the amounts to Lee A. Justice, Thomp- Graney, Attys., Dept., of Selected taxable the M. were to Washington, C., appellee. for sons.3 D. challenged juris- The Government the BROWN, and HUTCHESON Before of District to diсtion Court enter- SIMPSON, the Judges, District and Circuit involving Judge. tain the refund suit the 1956 that and Thompsons had no claims for Judge. the filed BROWN, Circuit R. JOHN Acknowledging years. refund for those Thompson, Charlie wife that claims had been filed Thompson, as Thompson, W. and I. never- the Government Minority Funds1 for Selected Trustee challenged theless, unsuccessfully, but to recover Court District sued in the jurisdiction of the District Court the taxes, penalties, interest and income to for entertain the refund suit $171,665.65, aggregate amount the claims fail- that the Thompsons the for the assessed grounds by levy adequately on ed set forth the and collected to 1952-1956 Thompsons and accounts the bank Government on for relief. The relied Selected.2 urged the- further various substantive paid tо under income ories September 19, 1949, On W. I. Thompsons. to was taxable Selected son, referring to himself as Donor and naming Trustee, that Select- District Court decided himself as an The executed organized operated establishing ex- ed is a trust and instrument Selected. Sub- clusively sequently Thompsons for or educational executed ‍‌‌​‌‌​​​​​‌‌​‌​‌‌‌‌​‌​‌​‌​​‌​‌‌‌‌​‌​​​​​​​​‌‌‌​​‍charitable pay- еxempt conveying purposes and from deed to I. thus Trustee, gas under Int.Rev. oil, of income taxes of all of ment 9/10ths ap- 501. 26 U.S.C.A. § other minerals in under Code proximately rejected conten- Van the Government’s 86 acres land royalty County, was tax- Field in tions that income Van Zandt Texas. Thompsons 1, 1951, After June able to that the effective date deed, gas royalties and thus ren- oil and claims were insufficient at- judgment them for the tributable to the mineral interest con- dered veyed paid 1952 1954.4 The Court dismissed to Selected. Because refund suit for the did not consider holding 1956, however, income Selected to accruing them, refund claims income had not filed did not question here The sole include this income in by for those the returns filed presented dis- correctness this them 1952-1956. The deficiencies resulted from missal. assessed determined Hereinafter Internal Revenue Service referred as Selected. deficiency based on additional interest by Levy 2. Collected on Account of $1,740.50 which the income Thompsons 1954 agreed Thompson Tear a deduction of Service also disallowed $42,806.48 1952 ? $1,209.71 in 1954 a contribution * 49,153.40 Selected. The District Court decided 30,863.50 Thompsons, issue this in favor * 24,843.07 appealed from Government has not * 23,999.20 decision. $73,669.98 $97,995.67 appealed 4. The Government has dispute. items these determinations. Note: now Clearly Reg Thompson.” Code5 The Government filing require urges of a also

ulations statement prior institution of a civil which the refund was Thomp suit reject refund. Neither claimed was insufficient. We dispute sons nor this control both contentions reverse. ling principle law; of the difference— I. difficulty of this therein the case— proper application. lies in its filing The of a or de may position prerequisite The of the ‍‌‌​‌‌​​​​​‌‌​‌​‌‌‌‌​‌​‌​‌​​‌​‌‌‌‌​‌​​​​​​​​‌‌‌​​‍Government mand as a to a suit to re assuming simply provision be stated. cover taxes is a familiar respects laws, “claims” in all other compliance of the revenue with Regula- complied may by with the upon Code which be insisted tions,7 ques- here in those United v. Felt Government. States & fatally Mfg. Co., tion are defective because Tarrant 283 U.S. taxpayer captioned “Name or line of 51 S.Ct. 75 L.Ed. 1025. Su The purchaser stamps” premе Form 843 object of on there Court has said that “[o]ne appeared Minority “Selected Fund” requirements of such is to advise the Thompson wife, “I. appropriate than officials of or the demands 7422(a) pro- expiration 5. statutory period § Int.Rev.Code of the applicable filing vides : limitation of a filing “(a) prior except suit claim for upon Nо claim therefor or more proceeding shall grounds suit or be refund.—-No set forth in a claim filed recovery any expiration court for the period. maintained of before the of such The alleged any internal revenue tax claim must forth in set detail each erroneously illegally assess- have been or which a credit or refund is claimed collected, any penalty or or of ed claimed apprise and facts sufficient to Com authority, collected have been missioner of the exact basis thereof. alleged any grounds or of sum to have been ex- statement of the and facts must any wrongfully col- by cessive or manner be verified a written declaration that lected, until a clаim for or credit penalties perjury. refund it is made under the duly Secretary has filed with the or comply been A claim which does not with this delegate, according provisions paragraph will not be considered regard, regulations purpose of law in for refund or credit. Secretary delegate establish- of the or his *( sj: tj: pursuance “(c) filing by ed in thereof.” Form for claim. Claims Code, taxpayer refunding The 1939 3772(a) Int.Rev.Code of over- (1), payment taxes, penalties, 53 Stat. contained a interest, requirement. like additions shall on Form to tax be made * * *. Treas.Reg. (1954), § 301.6402-2 “(d) Separate separate amended, claims for tax- T.D. Cum.Bull. 1962-1 provides: periods. income, able In the case of Requirement “(a) that claim be filеd. ‍‌‌​‌‌​​​​​‌‌​‌​‌‌‌‌​‌​‌​‌​​‌​‌‌‌‌​‌​​​​​​​​‌‌‌​​‍gift, unemployment taxes, and Federal (1) overpayments or Credits refunds of separate claim shall be for each made may not be allowed or after made the ex- type year peri- or tax for each taxable piration statutory period of the of limita- od.” properly applicable unless, tion before the Substantially aрpear- provisions identical expiration period, of such claim there- Regulations ed in the the 1939 under taxpayer. for has been filed Fur- Treas.Reg. Code. § 39.322-3. thermore, under civil section ac- may tion for refund instituted un- separate 7. The filed a claim on less a claim has within been filed year Form with- 843 for each properly applicable рeriod of limitation. period applicable of limitation “ (2) claim, together appropri- the office of district director supporting evidence, ate must be filed internal district the tax revenue in which office district director setting paid, was forth in verified each a internal revenue district in which the tax ground upon * * statement of the which *. claimеd, required “(b) (1) all set claim. Grounds forth in Regulations. 6, supra. No refund or credit will allowed after note See Thompson asserted, as to ed I. W. and Charlie so to be claims intended orderly Thompson. The claims for the administration insure an ” * * 272, 1953, 1955, and 1956 showed Id. at “Selected revenue Minority specif- Fund” as said more and were 377. We have 51 S.Ct. signed ically purpose the rule is “Selected Fund that the permit to correct But with the re- Commissioner Trustee.” and, ceipt first instance on March 1959 of this bundle errors in the claimed claims, disagreement persists, limit the liti- of refund the district director if gation complete have been re- had full and information. to the issues presented Commissioner bundle of claims themselves examined picture рrepared Car- a full had to defend. of the events which which he Cir., 1953, transpired Thomp- Scofield, F.2d 5 201 with relation to the mack Cir., 1932, 362; Elmore, years 360, 5 sons for 1952-1956.8 It Snead 59 clear from the claims that F.2d each dispute consecutive involves pe A brief consideration Thompson. The amount with I. W. demonstrates culiar facts of this case having on claim as been as- shown policies important are not sessed is amount shown undermined our decision receipt payment levy notice of Thompsons. year. corresponding taxes for the Like- payment wise the date of shown on each 5 claims in issue in the Court be- claim is the is- date on which the bank in one bundle to low were transmitted payment sued its in proper cаshier’s check director. Each claim district levy year. corresponding made, year for which it was showed ground refund, same was set forth the amount claimed claims for date amount claimed as a closely corresponded it set The claims for the forth in the claims for the “I. W. showed and/or sign- 1956.9 More than Thompson” and were following to the claims alone: obtainable reference 8. The information was $1,000 automatically accounts 9. The statement of the 1952/1954 unjusti- levy was trusts untaxable. This was as follows: ways.” fied two “The herein is without claim indicated legal theory Essentially year royalty payments the same cause. All language slightly directly paid different asserted to Selected indicated were clаim: Funds authorized Deed 1953/1955/1956 Payments directly herein indicated trust “The claim above to these Record.

6fi1 claims his own the Government but from which it did Director had with these appeal. Included which included them. files the Director’s file holding way brings This no into 1952- tax returns for sons’ Supreme rejection Court’s Internal 1956. That also included the Angelus Milling Commissioner, v.Co. covering Agent’s report Revenue S.Ct. investigation of those examination taxpayer’s L.Ed. conten- returns, copy essential ex- charged tion that the Commissioner is cerpts instrument from ‍‌‌​‌‌​​​​​‌‌​‌​‌‌‌‌​‌​‌​‌​​‌​‌‌‌‌​‌​​​​​​​​‌‌‌​​‍the trust knowledge might of all he learn From was created. from his vast files. Here the Director the Director knew these documents together. All treated all of the informa- provisions of essential together physically tion was and sub- not included in their had stantively He did not related. have to in- returns for those look elsewhere “somewhere under ” * * * to Selected come Commissioner’s roof for “in- tax-exempt income of Se- it was him formation which enable them, income to than lected pass on for refund.” [the] for assessed and that the deficienciеs 293, 299, 65 S.Ct. It years from the came about each of those was all there. Director did not that the of the Service look All have to he had to do was for. income was taxable look at. on the than to Selected the of this case Under circumstances not a valid educational that Selected was we hold filed for that claims were that trust. Thus the record reflects years 1953, 1955, and 1956.10 light and then facts before Director at the time the II. known sufficiently received, he was claims were doubt be Whatever there identity as to the advised unitary refund treatment wrongfully seeking as- refund for taxes years a sufficient claims for the for the sessed and collected validity upholding for basis 1955, and 1956. I, would claims discussed Part we rеturning District Direc- them the In to hold with the nevertheless forced similarly action was tor’s for another reason. discriminating claims distinction. The levy notice of served bank up and sent for all 5 were bundled and 1956 was on the envelope, Thompson in one space to I. W. back 668-A.11 In the usual Form blank true, statement, following printed under one cover letter. “You cоurse, hereby the Director returned is now notified that there are due, owing, they request fil- unpaid claims with the NAME from TAXPAYER,” name shown ed in the exact AND ADDRESS OF original lump following: return. But to “Se there was inserted the years (1953, Minority Thomp 1954 with these other Trust lected 1956) error Saline, was an That son, error. Texas.” Route Grand graphically Dis- demonstrated was levied The account Selеcted adverse to satisfy Court’s determination trict the tax stated to be due sufficiently Trust the Selected stated 10. Whether the claims By way. reason, unjustified requested in one all-sufficient authority question and deeds creat- of the trust III. in Part another resolved ing them, all checks automatical- trusts, ly $1,000 not a untaxable U. form of the 11. Form is the official 66S-A part Treasury Deрartment income and of one and without Rev- S. —Internal They per- purpose to serve. have OF entitled “NOTICE enue Service purpose.” sistently to serve that tried LEVY” years. reg- sofar as Mr. words of the each these Selected for —in upbringing required rural “[are to] set forth ulations — thought ground upon years, apparently detail which a- and 82 lead. credit or refund is claimed and follow the Government’s facts- he could deliberately, apprise precisely, sufficient to the Commissioner He did it Thus, thereof.” exact basis The text of with discrimination. ground claims in 1954 he filed claims significantly not of I. and Charlie does differ from the- the name Notice text of the held did because on the sufficient son. He years they Levy for were shоwn District Court for the 1952 and- those levy 1954,14 Taxpayer and the was satisfied the Government does (See appeal personal Note from out of funds. that determination. How- their ever, hand, 2, supra.) District Court did On the other not address sufficiency filed itself to he stated in of Selected because claims claims the name 1953/1955/1956 ruling Thompsons, Selected, because of not the individual its that no claims had' Taxpayer. proper person been filed at all was shown as those purposes of The Government for the levy collection of the taxes here pointed As we out in Carmack as tax- denominated Selected Scofield, 360,. Cir., 201 F.2d money representing payer. 361-362 and reiterated in United States taxes was collected Clay Prod., Cir., 1963,. Henderson Selected, no think one else. We 7, 17, principal require 324 F.2d “the accept it, Thompsons for was entitled to ** reg ment of the and statute designation of it as this thereto, supplementary ulations is might position whatever its technical apprised the Commissioner the- owing.12 as the from whom a tax is one exact, timely filing of a claim of the merely hold the claims filed We basis which the claim for a refund the name of Selected under circum- predicated.” Perhaps statem stances of this case were sufficient as an ent15 of the viewed —if precedent to claims meet the condition very paper in isolated not be —would regulations13 laid down the Code and full formative. But in the context filing of for the this suit. clearly appears expresses which it legal it the- theory Thompsons on which ex III. royalty- cluded their income the first, payments to Selected in the made Having established place; namely, was at the income years 1953, 1955, and filed interest tributable to the mineral remaining ques 1956, we now face the conveyed Selected,. which had to sufficiency of the of the claims in- tion provisions 13. The relevant of the Code and “taxpayer” 12. The word defined Int. regulations forth in notes 5 and are set 7701(a) (14) : Rev.Code of 6, supra. ‘taxpayer’ “Taxpayer. term means —The any person subject rev- to internal group The text of the tax.” enue supra. out in note sot strong argu- make a indicated herein 15. “The claim above certainly “sub- ment that Selected was Trust is- the Selected ject directly tax, or as to” a either way. By unjustified in one ‍‌‌​‌‌​​​​​‌‌​‌​‌‌‌‌​‌​‌​‌​​‌​‌‌‌‌​‌​​​​​​​​‌‌‌​​‍all-sufficient Status transferee identifiable income. authority and deeds creat- of the trust subject one to a tax not neces- need ing them, checks automatical- all liability sarily require unquestioned ly trusts, $1,000 untaxable not a legal- it. That turn on intricate part trust, and without income- one questions, g., They only purpose factual e. status to and serve. pur- persistently have tried to serve that charitable etc. pose.” min and This leaves unconsidered the trust. or charitable an educational weightier things law, recognized clearly of the theory in the not ac- delighted ceptable. I, therefore, prepared am to preliminary statements opinion returns, concur in statesmanlike of the the audit Service after my brother, Brown, theory case rejection formed this and the is, it seems clear me under the undis- determin- deficiencies basis for puted evidence, precise in full accordance with This еd for all right substance and of the case. in the was asserted the circumstances refund suit. Under Judge (dissent- SIMPSON, District handling including case, of this ing). previously one bundle the claims in indicated, the refund hold that we With deference to the views years 1953, 1956 was theory skillfully majority complaint support with- sufficient to Judge developed in I II of Parts principles this announced jurisdiction Opiniоn that Brown’s Henderson United v. States Court Clay Judge, exists, I District think that the 7; Cir., F.2d Prod., 5 opinion reasons set forth States, Cir., Hartley United (209 F.Supp. 530, page 537) at was cor- Cir., 262; Fahs, 5 Burrell F.2d rect in his that he was 1956, 232 F.2d 163. authority power or entertain respect action with claims judg- reasons, foregoing For the it Court insofar as ment the District complaint Judge related I dismissed years 1953, 1955, so with also to do deferеnce reversed, suggestion and 1956 is that a dissent Hutcheson’s align me, for further and remanded the case will District with the proceedings. Judge tax-gatherers, not inconsistent but also hypo- scribes, with the Pharisees Reversed remanded. 23-25). XXIII, (See, Matthew crites. Chapter appropriate cite If it is Judge (con- HUTCHESON, Circuit turning Verse, suggest I to Mark curring). XII, 14-17, admonition Verse, law in- It is to me that the clear “Render to Caesar 17th things Caesar’s, and to that are God is the law one branch of come taxation things (See also, Luke distinguish- that are God’s.” justice, equity as where 24-25.) XX, place law, ed from have little strict given statutory right that when one tax-gatherers omnipresent bring refund, sue him- for a he must ago, and omnivorous two thousand right. of that It within the reach self now, as are little concerned certainly courts have true that “weightier things law, judg- settled it that refund show- mercy ment, (Matthew and faith.” why ing specifically what and XXIII, 23, supra.) must be filed taxpayers, Sadly, before he can sue for refund. question, In never filed a refund claim. prevail also true that substance must view, my jurisdiction, fatal to which, approach (cid:127)over form and that an held. the Court below scribes, Pharisees and like that of n hypocrites, respectfully mint, I dissent. and cum- tithes anise

Case Details

Case Name: I. W. Thompson, Individually and Wife, Charlie Thompson v. United States

Court Name: Court of Appeals for the Fifth Circuit

Date Published: May 27, 1964

Citation: 332 F.2d 657

Docket Number: 20214

Court Abbreviation: 5th Cir.