*1 PRICE. STATES UNITED January 18, 1960. Argued 1959. Decided December No. 48. for the United argued A. the cause Howard Heffron Rankin, Solicitor General' States. On the brief were Rice, A. F. Prescott Attorney General Assistant George Lynch. F. McLane,.Jr. filed a brief the cause and argued
W. Lee respondent. opinion of the Court. Mr. Justice Harlan delivered against this action brought, The States United taxpayer for the collection of respondent statutory thereon. year 1946, taxes for the action ground The defended on the respondent the Commissioner not be could because. maintained had never issued to Internal Revenue “90-day let- known as a deficiency (commonly This defense was based ter”) question. for the amount 1939, 53 Internal Code of §on (a)(1) amended, Stat. providing pertinent part follows:
“If in the case any taxpayer, the Commissioner determines that is there in deficiency respect of the tax imposed by this chapter, the Commissioner is authorized to send notice of such to the taxpayer by registered mail. ninety days Within after such notice is mailed . .. the taxpayer may a„ file petition with the Tax Court of the United States for redetermination deficiency. of the No assessment of a in respect of the tax im- posed by chapter and no distraint or proceeding in court for its collection made, shall be begun, or prosecuted until such notice has been mailed to the taxpayer, nor until expiration of such ninety-day period, if a nor, petition has béen filed with the Tax Court, Tax Court has until decision become . .” final. .
The Government on relied the admitted respond- fact that ent had a Treasury executed Department form waiving the restrictions on assessment and collection of the defi- ciency for,1 sued and Code, § Stat. said to authorize such a waiver, provides:
“The shall at time right, by have the notice in signed writing filed with the Commis- 1The waiver Treasury was executed on United States Form entitled “Waiver of Restrictions on Assessment and Collection of Deficiency Tax,” read, in part, and relevant follows: provisions “Pursuant of Section 272 of the Internal Rev- Code, enue corresponding provisions prior internal and/or laws, provided (a) revenue restrictions in Section Code, Internal Revenue corresponding provisions prior and/or laws, hereby given internal revenue are waived and consent the assessment following deficiency and collection of the or deficiencies in tax:” in sub- the restrictions to waive
sioner, on the assessment section (a) of this section deficiency.” any part of the the whole collection of .effec- was not waiver held The District Court issued, and that had not been tive letter because The action. Court barred the therefore contrary in view 263 F. 2d Appeals affirmed, (cid:127) granted cer- Circuits,2 we in the First and Sixth decisions hereafter stated we For reasons tiorari. 359 U. think the below was error. court n By terms, its '(d). of 272 language We start with any time,” “at available to be right of . (a). 272§ to “the contained applicable restrictions” on assessment prohibitions Those restrictions include *3 mailing a deficiency prior of a to the and collection relating prohibitions no the same 90-day letter, less than' during such a letter period following the issuancé of deficiency may a a' petition redetermination Tax awaiting or is decision of the Court. filed pro- Respondent support the-view that seeks these only period applying visions should be read 90-day by noting letter that following the issuance of waivers of restrictions on the (d) is limited to deficiency,” of “the and assert- collection into ing deficiency” existence, “the does not come 90-day it until a This were, has been mailed. read- better ing is to follow from the first sentence statute said (a)(1): §272 any' taxpayer,
“If in the the Commissioner case respect is determines that there 2Associated, Delaney, Mutuals Moore 179, 182-184; F. v. 2d Co., v. United Cleveland R. See also Roos F. 2d 658-660. States, Supp. 90 Ct. Cl. 31 F. 144. tax imposed by chapter, the Commissioner is authorized to send notice of such taxpayer by registered mail.” npt
A it argued, “determined” until statutory has accept been issued. We cannot such fine-spun plain pro- refinements. The sense of this visión contemplates, first, determination, and then the sending persuasive a notice. No appears reason arti- ficially engrafting upon statutory excessively terms formal conditions.3 Nor do we find any force argument because determination and assessment of additional deficiencies may upon follow one already made, deficiency” “the referred to in § must be taken as previously limited to one determined.
. Section 272 does not support on its face therefore view that waiver the restrictions on assessment collection, a tax effective if filed issüance of a letter. We think a similar conclu-. sion follows from an examination legislative history of the relevant statutory enactments.
In creating the Tax (originally Court known as the Congress provided Board of Tax Appeals), forum in which taxpayers could obtain an “independent review of Commissioner Internal Revenue’s determination of additional . income . . taxes by the Board advance paying of their the tax found the Commissioner to be Commissioner, Colony due.” Old Trust Co. v. 279 U. S. *4 1924, 716, (a) 721. Section 274 of the Revenue Act of 297, 43 Stat. and the Revenue Act of 274 1926, (a), 44 § (the predecessors (a) Stat. 55 §of 272 of the 1939 Code), disabled the Commissioner from assessing or collecting any deficiency úntil a notice of deficiency such had been Co., supra, Moore v. Cleveland 3 See R. 659, analyzing at 271 § Code, 82, defining the “deficiency." of 53 Stat. 308 90) days thereafter, amended
issued, (later 60 appeal took to the taxpayer event that a an or, in the body period, Tax such until that Appeals of within Board even, However, though a final decision. had rendered contest the Commissioner's did not wish to Board, deficiency before the of determination original the due deficiency to accrue from such continued Board seeking tax the time for review until date of the. upon being thereafter collectible run, had such interest 1924, 274'(f), § Act of the tax. 43 Stat. Act in situation, added, 1926 Revenue meet this the
To provisions 44 re-enacted (d), § 274 Stat. waiver time, Congress (d) of the 1939 Code. At same § 272 292 provided, (j) (the predecessor § 274 § Code), filing of a waiver as stop running of interest on subsection should filing deficiency upon expiration, days of 30 from such deficiency, the assessment such whichever upon the earlier.4 The relation between the two sections Act, comparable the 1926 and between sections well, (1) is-provided the 1939 Code as clear: (d)] Code, for in order to [1939 “[i]n tax permit pay stop 1st interest,” Rep. Cong., Sess., p. 27; No. 69th (2) the is thereupon permitted Commissioner to assess Code, respects 292 of the 1939 is in Section 53 Stat. all counterpart, provided, material here with identical its pertinent part: upon
“Interest the amount determined as shall paid upon time assessed at the same as the shall be collector, .part demand from the and shall' be collected tax, per per -pre- at the annum rate of 6 centum from dáte payment for the scribed tax ... the date assessed, or, (d), the case of a waivér under section waiver, day filing thirtieth the date such or to the defi- n ciency is assessed whichever the earlier” *5 the tax free of the restrictions and collect contained Code, (3) taxpayer fa) (a)]; § and the § ^74 [1939 against running the protected interest, continued in assessment, to the cutoff delay by due. (j) Code, [1939 292]. find in it history purpose
We can this the discloses inferring it was no warrant that intended that tax- payer power running should be without to stop him until a formal notice has against issued.5 as will Yet, appear, necessary been such position. respondent’s Major placed effect of reliance passage on Report Senate Committee 1926 Act:
“In permit order to taxpayer pay the tax stop interest, the committee recom- mends in section 274 taxpayer bill at any time be permitted writing waive assessing restrictions on the commissioner against collecting the taking but tax, away right without to take the case to the board.” No. S.'Rep. Sess., p. 69th 1st Cong., Respondent claims that passage last clause should taken as indicating (d),-reenacted 274§ § 272 of the 1939 Code, does not prior sanction waivers to the issuance of a 90-day letter, because it is that event brought Board’s, and brings now Tax jurisdiction Court’s, to review play. deficiencies into To the passage obscurity read of which has previously —the judicially been noted6 —so as apply in ques- clause tion to waivers executed before issuance of a notice of Co., supra, Moore v. See R.' at 659-660. Cleveland Delaney, supra, Associated Mutuals respondent’s at 183.- Even interpretation the.passage not, however, give would literal effect language, to its for a not permitted would “at time be waive” the restrictions on assessment and collection of a .to but do deficiency. could so issuance despite waiver, require holding that, would *6 the Commissioner of a notice of by
the issuance to collection. prerequisite a assessment and remains acknowledges, it is incon- taxpayer But since, stop be to that a waiver would ceivable effective at the same time be ineffective interest, of running assess and immediately to permit .the Government to referred, deficiency to collect the. of reading necessary respondent’s result of a be infer that tax- would to Report Committee Senate to of power stop to without payer was deficiency had issued, until a formal notice *, of-deláy. periods Such involving not inconsiderable often "right” with the jibe an inference does not either any time,” “at file waiver gives statute Moreover, provisions. of the waiver purposes with require issuance of Congress had desired in all cir- deficiency prior to assessment and collection cumstances, likely accomplished it more have would jeopardy it in the instance of assess- directly, result did 44 Stat. 59 (b), ments. See Act of Code). (now (b) of the , subsequent legislative develop- Nor do we think that change the we have the statute. Several ments view statute, the Court years after the enactment expressed Ninth similar Appeals Circuit views formed the for the below. to those which basis decision Poe, 904; McCarthy Lumber F. 2d Mutual Co. v. Co. Commissioner, In 1938, Congress 80 F. 2d con- suggested sidered various in the revenue stat- revisions utes, Representatives'Subcommittee and House rec- . express repudiation an ommended those decisions. This not fail- adopted, recommendation was from tlie c act, acceptance ure to would have us infer an respondent Ninth Such Congress position. Circuit’s non- actioirby Congress affords the most dubious foundation positive drawing Moreover, inferences. -Subcom- discussion, mittee’s which is set in margin,7 out full support meaning does not sought to be derived from (cid:127) it. certain passages read, While isolated can be so taken 7“In order to enable the Government to collect admitted deficiencies orderly an expeditions delay necessarily manner without the involved the issuance of a formal notice of and also to taxpayers period enable to curtail the interest on such deficiencies by permitting the earlier Government make an possible, tax than otherwise would be the Bureau of' Internal cooperative Revenue has agreements taxpayers. entered into with practice long standing “It has been in the Bureau to endeavor signed agreement to secure pro- to additional taxes posed by agent an internal-revenue as the result of a field investi- *7 gation, proposed and also to taxes* in letters from the Commissioner preliminaries mailed as to the issuance of the formal of defi- ciency (a), authorized in 272 1936, section Revenue Act of and cor- -responding provisions prior practice It has acts. further been the regard signed agreement such a as a valid waiver under section (d), 1936, corresponding provisions Revenue prior Act and acts, purpose for the computing agreed on the interest deficiencies to in 292, 1936, accordance with section Act corre- sponding provisions prior is, deficiency act's. That aon so agreed computed to would be to the date of assessment or to the n day filing agreement, thirtieth after the of such whichever was the great majority In the of such earlier. cases the assessment is made days agreement within procured, thereby making after the is col- nearly of such lection deficienciesmore concurrent with their discovery required given' than would-be the case if formal notice were to be n “As a result of two Appeals decisions of the Circuit Court of for the (Mutual v. Poe, Ninth Circuit Lumber 906, Co. 2d certiorari F. 1936; McCarthy Jan. 6, denied Commissioner, v.Co. 80 F. 2d Apr. 1936), given certiorari by a valid waiver be cannot denied taxpayer prior to by Commissioner, determination as formal by 90-day letter, 60- deficiency evidenced or that there in tax. feeling “Your language subcommittee while that the statute already sufficiently clear, compelled, feels in view of the action of Supreme (Recom- denying certiorari, Court to recommend 47) mendation No. that an be amendment to insure the inserted validity given mailing deficiency letter, waivers before the provide right such amendment to that 'shall have the to us to appears said as a whole what Subcommittee long-stand that the Commissioner’s espouse position ing interpretation correct, of the statute was n the doubts clarification was because of called decisions, Ninth this Court by caused Circuit’s S. 655. to review. U. declined U. had. as unwise, thought proposal Congress Whether tell; we cannot accord argues, unnecessary, or respondent the failure can drawn.from properly no inference ingly, of the Congress act. ; similarly support are to find Finally, we unable history of the 1954 Code. respondent’s position in (for years taxable cov- recodification While settled Act) by expressly by question ered before us janee authorizing of a a waiver prior- letter,8 contain no clear statement to Con- the-reports n is, gress’ existing light view of then law. What there any deficiency proposed any -time manner that .at sending may. direct, or after the of the Commissioher whether before section, provided in notice of of that subsection writing, feigned waive á notice in and all restrictions condi- tions, imposed, and collection however immediate assessment on. any part proposed. the whole or so n proposed
“It amendment will a clear and is believed that furnish satisfactorily statutory long-established unquestionable basis for a *8 early functioning procedure. to departmental It will conducive the. necessity litigation, issues without for settlement of controverted retaining present privilege his while at the same time thereby terminating appeal paying deficiencies under Report of- interest.” Subcommittee of Ways Means, Proposed on Revision of Committee- on House 1938, Sess.,- Laws, Cong., pp. 53^54. the Revenue 75th 3d 6213 (d) of the 1954 Code reads follows: Section (whether at..any or not a notice, shall time “The issued) right, by signed been have the a. has .notice delegate, writing Secretary or his to waive restric- filed with the-assessment and tions on in subsection collection '" - deficiency.” any parbof of the whole or however, tends to favor Government’s contentions. The new statute amended another subsection of the sec containing provision, reports tion refer “only change as the material that amendment from existing Respondent argues law.”9 the change not probably thought waiver was “material.” regarding legislative history Inferences from cannot rest so Moreover, subsequent slender reed. the views of Con gress form a basis for inferring hazardous the intent of States Mine an earlier one. See United United Workers, S. 282. U. legislative history, then,
The does call not result contrary to that indicated language of Act. given We hold that a waiver pursuant to 272 Internal predecessor sections, Revenue Code its although prior to executed the issuance of a notice of fully is a effective instrument.
Reversed and remanded. Douglas, whom Mr. Justice Mr. Justice Stewart joins, dissenting. Poe,
Mutual Lumber
v. Co.
(b) (3) section, provision providing which contains new paid tax, respect tax, may amount or in of a be assessed upon receipt payment notwithstanding of such the restrictions on (a).” also, effect, contained subsection See to the same No./1622, Rep. Cong., Sess., p. 83d 2d