Amigo Coal Co. v. United States

Full title: AMIGO COAL CO. v. UNITED STATES

Court: United States Court of Claims.

Date published: Feb 4, 1935

9 F. Supp. 683 (Fed. Cl. 1935)

Opinion

9 F.Supp. 683 (Ct.Cl. 1935) AMIGO COAL CO. v. UNITED STATES No. L-210. United States Court of Claims. Feb. 4, 1935.

        This case having been heard by the Court of Claims, the court, upon the evidence adduced, makes the following special findings of fact:

        1. Plaintiff is a corporation of the state of West Virginia, mines and sells coal, and has its principal office at Amigo in said state.

        2. For the calendar years Ë916, 1917, 1918, 1919, and 1920 plaintiff severally filed, with the collector of internal revenue for the district of West Virginia, returns of its income and profits for tax purposes and paid the tax shown thereon as due or as found due by additional assessment, in amounts and on dates as follows:

-------------------------------------------------------------------
Year	Returned	Additional assessment	Assessed and paid	Date of payment
-------------	------------	----------	---------	---------------
1916.........	$221.79	..........	$221.79	May 3, 1917
1917.........	13,649.88	..........	13,649.88	June 10, 1918
1918.........	4,900.30	..........	1,225.07	June 11, 1919
1918.........	............	..........	1,340.75	June 25, 1919
1918.........	............	..........	1,109.43	Sept. 11, 1919
1918.........	............	..........	1,225.05	Dec. 12, 1919
1918.........	............	1 $251.58	251.58	June 21, 1920
1919.........	2,776.86	..........	511.62	Mar. 12, 1920
1919.........	............	..........	2,265.24	Apr. 21, 1920
1920.........	31,839.01	..........	7,959.75	Mar. 9, 1921
1920.........	............	..........	7,959.75	June 10, 1921
1920.........	............	..........	4,369.80	Sept. 15, 1921
1920.........	............	..........	4,369.80	Dec. 14, 1921
	------------	----------	---------
	53,387.84	251.58	46,459.51
		53,387.84
Returned and assessed......		53,639.42
Paid....................		46,459.51
		----------
Unpaid..................		7,179.91
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        FN 1 On May 1920 assessment list.

        3. On August 29, 1921, plaintiff filed with the collector a claim for abatement of $7,179.91 of its tax of $31,839.01 so returned for the calendar year 1920, on the ground that outstanding coal had been inventoried at contract selling price instead of cost price.

        4. On January 5, 1924, the Commissioner approved a schedule of overassessments, form 7805, showing overassessments totaling $4,302.99 in plaintiff's favor for the years 1916, 1917, and 1918, in the respective amounts of $14.07, $1,834.79, and $2,454.13, and these overassessments had been determined as the result of an audit in the office of the Bureau of Internal Revenue. Said schedule was transmitted to the collector of internal revenue for the district of West Virginia for his action in accordance with the directions appearing thereon. The collector complied therewith and on January 18, 1924, signed and returned said schedule to the Commissioner, together with a schedule of refunds and credits, form 7805-A. Of the overassessments totaling $4,302.99 as aforesaid the entire amount was shown by the collector to be refundable. On January 29, 1924, the Commissioner signed the schedule of refunds and credits, indicated thereon that said sum of $4,302.99 was refundable, and therein authorized the disbursing clerk of the Treasury Department to make payment of $4,302.99.

        5. On March 17, 1924, the Commissioner of Internal Revenue issued to the collectors of internal revenue his circular, "A & C--Mimeograph Coll. No. 3190." By this circular it was provided that all refund checks would be mailed to the appropriate collectors for disposition, "either by mailing them to the taxpayers, or where credit has been taken, by returning them to the Bureau." The circular recited the fact that this procedure was necessitated by delay in receiving a deficiency appropriation for refunding taxes that such delay would probably cause many taxpayers "to take credit in their current years' returns for the amounts due them," and that it was "necessary to take very stringent measures in order that refunds will not be made to income taxpayers who have taken credit, upon filing their returns for the taxable year 1923, for amounts previously certified for refund."

        6. On April 11, 1924, the disbursing clerk of the Treasury Department issued check for $4,302.99, payable to plaintiff. The check was sent to the collector and received by him a few days later. The collector notified plaintiff that he had received the check, checked the accounts of his office, found an unpaid balance of $7,179.91 for the year 1920, and sent the check May 26, 1924, to the Commissioner with the following letter of transmittal:

        "I have the honor to return herewith Treasury Voucher No. 411918 in the amount of $4,302.99, representing overpayment of income tax for the years 1916, 1917, and 1918, made by the Amigo Coal Company, Amigo, West Virginia, which amount was listed for refund on Schedule No. 8105, dated January 18, 1924.         "Inasmuch as there is an outstanding balance in the amount of $7,179.91, appearing on the 1921 March list under control number 41017, against which this overpayment is requested to be applied, refund voucher is returned in accordance with A & C Mim. No. 3190, dated March 17, 1924.'

        Plaintiff did not at any time make request for the application referred to in the foregoing letter of transmittal. The request mentioned therein had reference to the instructions given in A & C Mimeograph Coll. No. 3190, and plaintiff did not at any time take credit in its tax returns for the overpayment of $4,302.99.

        7. June 26, 1924, the Commissioner by letter advised the collector that proceeds of the check for $4,302.99 had been repaid to the appropriation from which drawn, and instructed him to apply that mount against plaintiff's unpaid and outstanding balance for 1920. The collector complied with this instruction and on his record June 27, 1924, deducted $4,302.99 from the unpaid and outstanding balance of $7,179.91, leaving thereon an unpaid and outstanding balance of $2,876.92. No further action was taken with reference to this credit either by the Commissioner or the collector.

        8. For the year 1919 the Commissioner, on November 10, 1924, determined an overassessment of $563.63, and this amount was, by the collector, November 22, 1924, deducted from plaintiff's unpaid and outstanding balance of $2,876.92, leaving the balance $2,313.29. Interest of $55.77 was allowed on the overassessment of $563.63 for 1919, check was issued therefor and indorsed by the plaintiff, and this interest was deducted by the collector June 10, 1925, from the then unpaid and outstanding balance of $2,313.29, leaving the balance $2,257.52.

        9. Thereafter the Commissioner determined a deficiency in tax of $3,818.98 for the year 1920, of which plaintiff was advised by a sixty-day letter dated December 8, 1925, which also stated that the claim in abatement for 1920 would be rejected and the rejection would appear on the next schedule to be approved by the Commissioner, and said claim in abatement was formally rejected on or about November 29, 1927. Plaintiff appealed to the United States Board of Tax Appeals, and on the Board's order of redetermination on December 15, 1927, $2,257.52 was abated and $1,103.42 was refunded. July 25, 1928, the collector applied the abatement of $2,257.52 against the balance of the same amount, leaving no unpaid outstanding balance. Interest was computed and allowed on the refund of $1,103.42 as follows:

-------------------------------------------------------
On	From--	To--	Interest
--------	-----------------	----------------	--------
55.77	June 10, 1925 ....	August 4, 1928 ....	$10.55
1,047.65	January 5, 1924 ..	August 4, 1928 ....	288.03
--------			--------
1,103.42			298.58
-------------------------------------------------------

        10. No interest was computed or allowed on any part of the overassessments of $14.07 for 1916, $1,834.79 for 1917, or $2,454.13 for 1918.

        11. Claims for refund were filed by the plaintiff and acted upon as follows:

-----------------------------------------------------
Amount	Filed	Action taken
----------	-----------------	----------------------
$26,592.34	December 13, 1926	Rejected February 24, 1927.
1,103.42	December 27, 1927	Allowed July 17, 1928.
-----------------------------------------------------

        Allen H. Gardner, of Washington, D.C. (Morris KixMiller & Baar, of Washington, D.C., on the brief), for plaintiff.         John A. Rees, of Washington, D.C., and Frank J. Wideman, Asst. Atty.Gen., for the United States.

        Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.

        GREEN, Judge.

        The findings show that the matter of the application of the overpayments for the years 1916, 1917, and 1918 in the total amount of $4,302.99 was not finally determined by the Commissioner until June 26, 1924, when he directed the collector to apply the amount of these overpayments to the balance due on the 1920 taxes. While some further action was taken with reference to the balance then remaining on the 1920 taxes, no further action was taken with reference to this credit either by the Commissioner or the collector.

        It follows that the credit thus allowed was made while the Revenue Act of 1924 was in force and the matter of interest would be controlled thereby. The statute then prevailing (Revenue Act 1924, § 1019, 26 USCA § 153 note) allowed interest "at the rate of 6 per centum per annum from the date such tax * * * was paid * * * to the due date of the amount against which the credit is taken." In the case of Riverside & Dan River Cotton Mills v. United States, 37 F. (2d) 965, 69 Ct.Cl. 70, 75, we held that where the tax was paid in this case, the words "due date" meant the date provided for the payment of the installments. These matters being decided, it is conceded by defendant that plaintiff has not received the full amount of interest to which it is entitled.

        The plaintiff is entitled to recover, but before judgment is entered counsel for the respective parties may submit to the court a stipulation as to the exact amount of interest which should b entered in accordance with this opinion, if they can agree thereon. If not, they may submit computations of this amount as they respectively consider it should be determined, and upon consideration thereof the court will enter final judgment.

        BOOTH, Chief Justice, and WILLIAMS and LITTLETON, Judges, concur.

        WHALEY, Judge, took no part in the consideration or decision of this case.