61 Ct. Cl. 363 | Ct. Cl. | 1925
delivered the opinion of the court:
By this suit the plaintiff, a corporation engaged in the manufacture of cotton goods, seeks to recover certain income, war tax, and excess-profits taxes for the year 1917. It is not a suit to recover an excess in amount of taxes exacted over the amount that was properly due and payable under the taxing statutes. But treating the limitation of five years, under section 250 (d), act of 1921, as extinguishing
The suit was brought in this court October 4, 1924. The petition avers that plaintiff filed its income and excess-profits tax returns for the taxable year 1917 on or before April .1, 1918, and did not file any amended return; that in making up its return its income for January, February, and March, 1917, was estimated and that this estimate was “ necessarily inaccurate ” because its books had not been closed, nor an inventory taken on December 31, 1916. It points out that the commissioner’s method of determining the net income was different from that adopted by itself, and states that more than five years after its returns had been filed the Commissioner of Internal Revenue determined and assessed against it additional income and excess-profits taxes for the year 1917, and that upon notice and demand upon it by the collector the plaintiff paid these additional taxes under protest on November 8, 1923. It is alleged that the commissioner determined and assessed against it “ grossly excessive additional income and excess-profits taxes, * * * on the basis of an arbitrary, inaccurate, and unlawful estimate of a supposed net income,” and it is further averred that plaintiff filed two claims for refund of these additional taxes, which it had paid, claiming in one of them that the commissioner had adopted an erroneous method for determining the net income, and in the other it claimed the refund because the assessment and collection of the additional taxes had been made more than five years after its return of April 1, 1918, and were barred by the statute of limitations established by section 250 (d) of the revenue act of 1921, and that plaintiff “ did not consent in writing to a later determination, assessment, or collection ” of the additional taxes. Both of these claims for refund were disallowed by the commissioner, one in February, 1924, and the other in September, 1924.
Notwithstanding the averments of the petition, the stipulated facts have no reference to the correctness of the commissioner’s determination of the amount of taxes that plaintiff owed. There is nothing to question the accuracy of his decision if it had been made earlier than it was made. For aught that appears to the contrary, plaintiff owed the additional taxes, which were collected, though paid under protest, up to the time of the expiration of the five-year limit, upon which it now relies. The petition does aver that the commissioner assessed against plaintiff grossly excessive additional income and excess-profits taxes on the basis of an arbitrary estimate; but there is no proof of this allegation or of the basis upon which he did proceed. It is a fair deduction that this feature is abandoned. The petition admits that the plaintiff’s return filed April 1, 1918, was necessarily inaccurate.
The act of 1921 provides: “ Sec. 250 (d). The amount of income, excess-profits, or war-profits taxes due under any return made under this act * * * for prior taxable years or under prior income, excess-profits, or war-profits tax acts * * * shall be determined and assessed within five years after the return was filed, unless both the commissioner and the taxpayer consent in writing to a later determination, assessment, and collection of the tax and no suit or proceeding for the collection of any such taxes due under this act or under prior income, excess-profits, or war-profits tax acts * * * shall be begun after the expiration of five years after the date when such return was filed. * * * Provided further, That in the case of a false or fraudulent return with intent to evade tax or of a failure to file a required return the amount of tax due may be determined, assessed, and collected and a suit or proceeding for the collection of such amount may be begun at any time after it becomes due.” (42 Stat. 264.) <
It is manifest that this act does not prescribe a limitation of five years in every case. The limitation is not effective where there has been a “ consent ” to a later determination,
The suit being one against the United States, is maintainable only in accordance with the conditions which the Government has prescribed in consenting to be sued. “ If it attaches even purely formal conditions to its consent to be sued, these conditions must be complied with.” Rock Island, etc., R. R. v. United States, 254 U.S. 141, 143. The stipulated facts leave too much to implication. The plaintiff can not recover without showing a valid claim against the United States.
The petition should be dismissed. And it is so ordered.