257 F. 576 | S.D.N.Y. | 1919
This case comes up for further hearing upon the amount of the verdict to be directed. The plaintiff has succeeded upon the issue that the dividends deducted from premiums are a proper allowance, but has failed, in securing
The amount sued for was $73,277.54. Certain amounts the defendant concedes to have been erroneously assessed and collected. They amount to:
Clerical error .........................................$ 100.00
Depreciation for furniture, etc.......................... 594.52
Addition to income to bring the premium receipts to an
accrual basis ....................................... 4,163.59
Addition to income to bring interest and rents, etc., to an accrual basis ....................................... 4,011.27 $ 9,409.68
To this should be added the dividends applied in payment of the renewal premiums, which I have decided to have been erroneous........................................ 18,994.87
828,464.55
But the Commissioner in his assessment allowed the plaintiff to charge off $928,977.73, which was the amount of amortization necessary to bring down the book value of certain of its bonds to their market value, and a further sum of $86,492.14, a book adjustment for increasing or decreasing the book value of certain bonds, in order to adjust the accruals of discounts and to amortize the premiums at which it had purchased them. The sum of the taxes on these two items is $10,154.70. As the Commissioner added to the plaintiff's gross income an increase on the market value of certain of its bonds to the amount of $250,947.52, the tax upon this should be deducted, and that tax is $2,509.58.
The net result of these errors of the Commissioner shows an underassessment of $7,645.22, and if this sum be deducted from the amount of the plaintiff’s recovery, $28,464,55, the resulting verdict would be $20,819.33. The question is whether the defendant may be allowed to disregard the Commissioner’s return and to treat this action as though it were to re-assess the tax de novo, and to recover only the balance overpaid upon such a re-assessment.
Now it is well settled that no assessment of the Commissioner of Internal Revenue is necessary for the collection of a tax, at least in a direct action by the United States. Dollar Savings Bank v. U. S., 19 Wall. 227, 22 L. Ed. 80; U. S. v. Chamberlin, 219 U. S. 250, 31 Sup. Ct. 155, 55 L. Ed. 204; U. S. v. Grand Rapids, etc., R. R. (D. C.) 239 Fed. 153. Nor does it make any difference that an assessment has been made, for in spite of the assessment, and of the expiration of the period within which an amended assessment can be made, the United States may still sue for the amount actually due. U. S. v. Phila. & Reading R. R., 123 U. S. 113, 8 Sup. Ct. 77, 31 L. Ed. 138; U. S. v. Minneapolis Threshing Machine Co. (D. C.) 229 Fed. 1019; U. S. v. Tilden, 9 Ben. 368, Fed. Cas. No. 16,519.
-1 do not think it makes any difference that this suit is in form against the collector,, because the recovery in the end' comes from the United States, so that, even if the collector were personally es-topped, that estoppel under the circumstances does not apply against the United States. It therefore follows that the defendant is right, and that the recovery <4iould be upon the basis of a corrected assessment of the tax, regardless of the Commissioner’s unwarranted deductions in favor of the plaintiff at the time of his assessment.
A verdict will therefore be directed for the plaintiff in the sum of $20,819.33, with interest from February 3, 1912, except on the sum of $694.52.